Long-run aggregate supply shifts are caused by
A) changes in consumption,investment,government spending,and net exports.
B) temporary changes in input prices.
C) changes in expected future price levels.
D) changes in resources,technology,and institutions.
E) changes in consumption,investment,government spending,net exports,resources,technology,and institutions.

Question

Quizplus · Accepted Answer

Long-run aggregate supply shifts are caused by changes in resources (such as natural resources or labor force), technology (such as new innovations or production techniques), and institutions (such as laws or regulations). These factors can affect the productive capacity of the economy in the long run. Changes in consumption, investment, government spending, and net exports may have a temporary impact on the aggregate supply but do not affect the long-run potential output of an economy. Changes in expected future price levels may affect short-run aggregate supply but do not affect long-run aggregate supply.

Long-Run Aggregate Supply Shifts Are Caused by