When an economy experiences economic growth,the
A) long-run aggregate supply curve is unaffected.
B) long-run aggregate supply curve shifts to the right.
C) long-run aggregate supply curve shifts to the left.
D) aggregate demand curve shifts to the left.
E) short-run aggregate supply curve shifts to the left.

Question

Quizplus · Accepted Answer

Economic growth results in an increase in potential output, which implies that the economy's capacity to produce goods and services in the long run has increased. Therefore, the long-run aggregate supply curve shifts to the right, indicating that at any price level, the real output that an economy can produce in the long run has increased.

When an Economy Experiences Economic Growth,the