Exhibit 5.4

-Refer to Exhibit 5.4, which shows the aggregate demand and supply curves for the United States. A rightward shift of the aggregate supply curve from AS to AS' is likely to be caused by _____

Question

Exhibit 5.4
 
-Refer to Exhibit 5.4, which shows the aggregate demand and supply curves for the United States. A rightward shift of the aggregate supply curve from AS to AS' is likely to be caused by _____

Quizplus · Accepted Answer

A rightward shift of the aggregate supply curve is caused by factors that increase the ability of firms to produce goods and services at each price level, such as a decrease in resource prices or improved technology. An extension of patent protection may also encourage innovation and increase supply, but it is not listed as a choice. Conversely, an increase in resource prices or a shortening of patent protection would decrease supply, shifting the curve to the left. Choices D and E are unrelated to aggregate supply.

Exhibit 5.4 -Refer to Exhibit 5.4, Which Shows the Aggregate Demand and the Aggregate