Economic growth is shown as a _____ aggregate supply curve.
A) shift to the left of the long-run
B) movement up along the short-run
C) shift to the right of the long-run
D) shift to the left of the short-run

Question

Quizplus · Accepted Answer

Economic growth is shown as a rightward shift of the long-run aggregate supply curve (LRAS). This is because economic growth represents an increase in the potential output of an economy, which is captured by an increase in the factors of production such as capital, labor, and technology. As a result, the LRAS curve shifts to the right, indicating that the economy can produce more goods and services at any given price level.

Economic Growth Is Shown as a _____ Aggregate Supply Curve