If technological change shifts the long-run aggregate supply curve to the right, it will also do which of the following?
A)It will shift the short-run Phillips curve and the long-run Phillips curve to the right.
B)It will shift the short-run Phillips curve and the long-run Phillips curve to the left.
C)It will shift the short-run aggregate supply curve to the right and the long-run Phillips curve to the left.
D)It will shift the short-run aggregate supply curve to the right and leave the long-run Phillips curve unaffected.

Question

Quizplus · Accepted Answer

Technological change shifts the long-run aggregate supply curve to the right, which means that the economy can produce more output at any given price level in the long run. This shift does not affect the natural rate of unemployment, which is represented by the long-run Phillips curve. Therefore, the short-run aggregate supply curve will shift to the right, but the long-run Phillips curve will remain unaffected.

If Technological Change Shifts the Long-Run Aggregate Supply Curve to the Right