The short-run aggregate supply curve shifts when
I. the full-employment quantity of capital changes.
II. technology advances.
A) I is true and II is false
B) I is false and II is true
C) I and II are both false
D) I and II are both true

Question

Quizplus · Accepted Answer

Both the full-employment quantity of capital changing and advancements in technology can cause the short-run aggregate supply curve to shift. Changes in capital affect production capacity, while technological advancements can increase productivity, both influencing the quantity of goods and services supplied in the short run.

The Short-Run Aggregate Supply Curve Shifts When