Economic growth can be shown by
A) a leftward shift in the aggregate supply curve.
B) no change in the aggregate supply curve.
C) a rightward shift in the aggregate supply curve.
D) a leftward shift in the production possibilities curve.

Question

Quizplus · Accepted Answer

Economic growth results in an increase in the productive capacity of the economy, which is shown by a rightward shift in the aggregate supply curve, indicating that more goods and services can be produced at every price level. A leftward shift in the aggregate supply curve would indicate a decrease in the productive capacity of the economy, which is the opposite of economic growth. The production possibilities curve is used to illustrate the trade-offs inherent in producing two different goods, and a leftward shift in this curve would indicate a decrease in the potential output of both goods, which is not necessarily related to economic growth.

Economic Growth Can Be Shown by