Economic growth causes the
A) production possibilities curve to shift rightward and the long-run aggregate supply curve to shift rightward.
B) production possibilities curve to shift leftward and the long-run aggregate supply curve to shift rightward.
C) production possibilities curve to shift rightward and the long-run aggregate supply curve to shift leftward.
D) production possibilities curve to shift leftward and the long-run aggregate supply curve to shift leftward.

Question

Quizplus · Accepted Answer

Economic growth is an increase in real GDP over time. This leads to an increase in the production possibilities curve, as more goods and services can be produced with the same amount of resources. Additionally, economic growth leads to an increase in the potential output of an economy, which shifts the long-run aggregate supply curve to the right.

Economic Growth Causes the