Both the long-run and short-run aggregate supply curves will shift when
A) the government increases defense spending.
B) an event occurs which is expected to last only a short period of time.
C) they are both upward sloping.
D) the endowments of the factors of production change.

Question

Quizplus · Accepted Answer

Both the long-run and short-run aggregate supply curves will shift when factors of production change. For example, if there is an increase in the availability of labor or a decrease in the price of raw materials, the short-run and long-run aggregate supply curves will shift to the right.

Both the Long-Run and Short-Run Aggregate Supply Curves Will Shift