If an advance in technology shifts the long-run aggregate supply curve outward, prices _____ and output _____.

Question

Quizplus · Accepted Answer

If the long-run aggregate supply curve shifts outward due to an advance in technology, it means that the economy is able to produce more output at every price level. This leads to a decrease in prices and an increase in output, as represented by the movement along the new long-run aggregate supply curve. Therefore, option A is the best choice.

If an Advance in Technology Shifts the Long-Run Aggregate Supply