An improvement in technology would shift which of the following curve(s)?
A) aggregate demand and short-run aggregate supply
B) only the short-run aggregate supply
C) only the aggregate demand
D) short-run and long-run aggregate supply

Question

Quizplus · Accepted Answer

An improvement in technology would lead to an increase in productivity and a decrease in the cost of production, which would shift the short-run aggregate supply curve to the right. As firms become more efficient, they can produce more output at each price level. Over time, as firms invest in new capital equipment and adjust their production processes, the long-run aggregate supply curve also shifts to the right. This means that the economy can produce more output at lower prices in the long run. Consequently, there would be a shift in both the short-run and long-run aggregate supply curves.

An Improvement in Technology Would Shift Which of the Following