How would a beneficial supply shock affect the aggregate supply curves?
A) The long-run aggregate supply curve would shift inward, and the short-run aggregate supply curve would shift inward.
B) The short-run aggregate supply curve would shift inward, and the long-run aggregate supply curve would shift outward.
C) The short-run aggregate supply curve would shift outward, but the long-run aggregate supply curve would remain the same.
D) The long-run aggregate supply curve would shift outward, and short-run aggregate supply curve would shift outward.

Question

How would a beneficial supply shock affect the aggregate supply curves?  
A) The long-run aggregate supply curve would shift inward, and the short-run aggregate supply curve would shift inward. 
B) The short-run aggregate supply curve would shift inward, and the long-run aggregate supply curve would shift outward. 
C) The short-run aggregate supply curve would shift outward, but the long-run aggregate supply curve would remain the same. 
D) The long-run aggregate supply curve would shift outward, and short-run aggregate supply curve would shift outward.

Quizplus · Accepted Answer

A beneficial supply shock, such as a technological advancement or a decrease in the cost of raw materials, would increase the overall productivity of the economy. This leads to an outward shift in both the short-run and long-run aggregate supply curves, as it becomes cheaper and more efficient to produce goods and services at every price level.

How Would a Beneficial Supply Shock Affect the Aggregate Supply