An economy has experienced a rightward shift of its long-run aggregate supply curve and is now producing on that new long-run aggregate supply curve.It is reasonable to expect that:
A) the unemployment rate has fallen.
B) the unemployment rate has been unaffected.
C) the inflation rate has risen.
D) the price level has risen.
E) productivity has fallen.

Question

Quizplus · Accepted Answer

A rightward shift in the long-run aggregate supply curve indicates an increase in the economy's potential output, often due to factors like technological advancements or an increase in resources. This shift does not necessarily affect the unemployment rate in the long run, as the economy is producing at its full employment level.

An Economy Has Experienced a Rightward Shift of Its Long-Run