Refer to the following figure to answer the next questions.

-Based on the figure, which of the following would cause the long-run equilibrium point to change from point B to point D?
A) The population has aged and there are fewer people in the labor force.
B) Firms and workers expected the price level to rise.
C) The economy experienced an increase in government spending.
D) The economy was in an expansion and has adjusted.
E) The country's overall productivity increased.

Question

Refer to the following figure to answer the next  questions.
 
-Based on the figure, which of the following would cause the long-run equilibrium point to change from point B to point D?
A) The population has aged and there are fewer people in the labor force. 
B) Firms and workers expected the price level to rise. 
C) The economy experienced an increase in government spending. 
D) The economy was in an expansion and has adjusted. 
E) The country's overall productivity increased.

Quizplus · Accepted Answer

An increase in the country's overall productivity would shift the long-run aggregate supply curve to the right, moving the equilibrium from point B to point D.

Refer to the Following Figure to Answer the Next