Suppose a developing country receives more machinery and capital equipment as foreign entrepreneurs increase the amount of investment in the economy.As a result
A)the long-run aggregate supply curve will shift to the right.
B)the long-run aggregate supply curve will shift to the left.
C)the economy will move up along the long-run aggregate supply curve.
D)the economy will move down along the long-run aggregate supply curve.
E)the short-run aggregate supply curve will shift to the left.

Question

Quizplus · Accepted Answer

With the increased investment in machinery and capital equipment, productivity and efficiency within the economy will increase. This will lead to an increase in potential output and shift the long-run aggregate supply curve to the right.

Suppose a Developing Country Receives More Machinery and Capital Equipment