An economy has experienced a rightward shift of its long-run aggregate supply curve and is now producing on that new long-run aggregate supply curve.It is reasonable to expect that
A) the cyclical unemployment rate has fallen.
B) the cyclical unemployment rate has been unaffected.
C) the inflation rate has risen.
D) the price level has risen.
E) productivity has fallen.

Question

Quizplus · Accepted Answer

A rightward shift in the long-run aggregate supply curve indicates an increase in the economy's productive capacity, which typically does not affect the cyclical unemployment rate as it relates to short-term economic fluctuations.

An Economy Has Experienced a Rightward Shift of Its Long-Run