Over time, changes in investment
I. shift a nation's production possibilities curve outward.
II. shift the long-run aggregate supply curve to the right.
III. shift the short-run aggregate supply curve to the right.
IV. contribute to economic growth.

Question

Quizplus · Accepted Answer

Investment increases capital stock, leading to more resources and technological advancements, which can shift the production possibilities curve outward, the long-run aggregate supply curve to the right, and contribute to economic growth. In the short run, increased investment can also shift the short-run aggregate supply curve to the right by increasing productive capacity.

Over Time, Changes in Investment