Which of the following would result from a positive productivity shock?

Question

Quizplus · Accepted Answer

A positive productivity shock would increase the economy's long-run potential growth rate by increasing the efficiency of production and reducing costs. This would shift the long-run aggregate supply curve to the right, leading to lower prices and higher output levels in the long run. A positive supply shock would not lead to an increase in inflation or a shift in the aggregate demand curve.

Which of the Following Would Result from a Positive Productivity