Which of the following would cause an increase in long-run aggregate supply?
A) The price level increases.
B) The price level decreases.
C) Firms and workers expect the price level to fall.
D) Firms and workers expect the price level to rise.
E) The stock of capital increases.

Question

Quizplus · Accepted Answer

An increase in the stock of capital would increase the productive capacity of an economy, which would lead to an increase in long-run aggregate supply.

Which of the Following Would Cause an Increase in Long-Run