When the quantity of capital increases, then the
A)SAS curve shifts rightward and the LAS curve shifts rightward.
B)LAS curve shifts rightward and the SAS curve does not shift.
C)SAS curve shifts rightward and the LAS curve shifts leftward.
D)SAS curve shifts rightward and the LAS curve does not shift.

Question

Quizplus · Accepted Answer

An increase in the quantity of capital increases the productive capacity of the economy, leading to a rightward shift in both the Short-Run Aggregate Supply (SAS) and Long-Run Aggregate Supply (LAS) curves.

When the Quantity of Capital Increases, Then the