In recent years, Japan's capital stock has increased by about 6 percent from one year to the next. As a result, we would expect
A) a leftward shift in Japan's aggregate demand curve.
B) a movement up along Japan's short-run aggregate supply curve.
C) only Japan's long-run aggregate supply curve to shift rightward.
D) rightward shifts in both Japan's short-run aggregate supply and long-run aggregate supply curves.

Question

Quizplus · Accepted Answer

An increase in capital stock enhances a country's productive capacity, leading to rightward shifts in both the short-run and long-run aggregate supply curves as the economy can produce more goods and services with the additional capital.

In Recent Years, Japan's Capital Stock Has Increased by About