When potential GDP increases,the potential GDP line ________,and the aggregate supply curve ________.
A)shifts rightward;shifts rightward
B)shifts rightward;shifts leftward
C)shifts leftward;shifts rightward
D)shifts leftward;shifts leftward
E)shifts rightward;does not shift

Question

Quizplus · Accepted Answer

When potential GDP increases, the potential GDP line shifts rightward, indicating that the economy can produce more goods and services at every price level. This leads to a corresponding shift in the aggregate supply curve to the right, meaning that businesses are willing and able to produce more output at every price level.

When Potential GDP Increases,the Potential GDP Line ________,And the Aggregate