In recent years, Japanʹs capital stock has increased by about 6 percent from one year to the next. As a result, we would expect
A) rightward shifts in both Japanʹs short-run aggregate supply and long-run aggregate supply curves.
B) only Japanʹs long-run aggregate supply curve to shift rightward.
C) a leftward shift in Japanʹs aggregate demand curve.
D) a movement up along Japanʹs short-run aggregate supply curve.

Question

Quizplus · Accepted Answer

An increase in capital stock enhances productive capacity, leading to rightward shifts in both short-run and long-run aggregate supply curves.

In Recent Years, Japanʹs Capital Stock Has Increased by About