A technological advance ________ aggregate supply, shifting the aggregate supply curve ________ and potentially bringing the ________ phase of the business cycle.
A) increases; rightward; expansion
B) increases; leftward; expansion
C) increases; rightward; recession
D) decreases; leftward recession
E) decreases; rightward; expansion

Question

Quizplus · Accepted Answer

Technological advances increase aggregate supply by making production more efficient, which shifts the aggregate supply curve rightward. This can lead to an expansion phase in the business cycle as more goods and services are available at lower prices, stimulating economic growth.

A Technological Advance ________ Aggregate Supply, Shifting the Aggregate Supply