Economic growth is demonstrated by the LRAS as it
A) shifts to the right.
B) shifts to the left.
C) becomes more horizontal.
D) becomes more vertical.

Question

Quizplus · Accepted Answer

Economic growth is characterized by an increase in potential GDP, which is demonstrated by a rightward shift of the long-run aggregate supply curve (LRAS). This shift indicates an expansion in the economy's productive capacity, leading to an increase in the potential output of goods and services that can be supplied at any given price level. Therefore, option A is the correct answer.

Economic Growth Is Demonstrated by the LRAS as It