The Polish experience indicates that
A)the aggregate supply curve is vertical, even in the short run.
B)changes in the expected price level do not affect aggregate supply.
C)the transition from a centrally planned to a market economy can result in an upward shift in the short-run aggregate supply curve.
D)increases in the factor productivity will shift the long-run aggregate supply curve to the left.

Question

Quizplus · Accepted Answer

The Polish experience showed that the transition from a centrally planned to a market economy can lead to an upward shift in the short-run aggregate supply curve. This is because the market economy encourages competition and innovation, which can increase the efficiency of production and lead to higher output levels in the short run. The other options are incorrect as they do not reflect the findings of the Polish experience.

The Polish Experience Indicates That