A breakthrough in solar energy research that halves the cost of electricity will
A) shift the aggregate supply curve to the left.
B) shift the aggregate supply curve to the right.
C) cause the aggregate supply curve to become vertical.
D) have no effect on the aggregate supply curve.

Question

Quizplus · Accepted Answer

A breakthrough in solar energy research that halves the cost of electricity will likely increase the supply of solar energy, which will shift the aggregate supply curve to the right. As a result, the economy will have more goods and services at a lower price level, leading to an increase in real output and a decrease in the general price level.

A Breakthrough in Solar Energy Research That Halves the Cost