Use the following to answer questions:
Figure: AD-AS Model II
-(Figure: AD-AS Model II) Refer to Figure: AD-AS Model II. If productivity increases, the _____ curve will shift to the _____.
A) SRAS; left
B) SRAS; right
C) AD; left
D) AD; right

Question

Use the following to answer questions:
Figure: AD-AS Model II 
-(Figure: AD-AS Model II) Refer to Figure: AD-AS Model II. If productivity increases, the _____ curve will shift to the _____.
A) SRAS; left 
B) SRAS; right 
C) AD; left 
D) AD; right

Quizplus · Accepted Answer

Increasing productivity will result in lower production costs and therefore an increase in aggregate supply. This shift will be represented by a rightward shift in the short-run aggregate supply (SRAS) curve.

Use the Following to Answer Questions