A rightward shift of the long-run aggregate supply curve is caused by
A)an increase in the minimum wage.
B)an increase in the average duration of unemployment.
C)improvements in technology and resource endowments.
D)an increase in the GDP deflator.

Question

Quizplus · Accepted Answer

A rightward shift of the long-run aggregate supply curve is caused by improvements in technology and resource endowments. This means that the economy can produce more output with the same amount of resources, leading to an increase in potential output. An increase in the minimum wage (A) or an increase in the average duration of unemployment (B) would shift the short-run aggregate supply curve and have no effect on the long-run aggregate supply curve. An increase in the GDP deflator (D) would be a movement along the aggregate supply curve and not shift it.

A Rightward Shift of the Long-Run Aggregate Supply Curve Is