In the aggregate demand/aggregate supply model,an increase in a country's sustainable potential output is represented by an increase in
A)prices.
B)aggregate demand.
C)long-run aggregate supply.
D)an increase in the general level of prices.

Question

Quizplus · Accepted Answer

An increase in sustainable potential output means that the economy can produce more goods and services in the long run. This is represented by a rightward shift in the long-run aggregate supply (LRAS) curve, indicating an increase in the economy's productive capacity without putting upward pressure on prices. Therefore, the correct answer is C.

In the Aggregate Demand/aggregate Supply Model,an Increase in a Country's