-Refer to Exhibit 17-3 Assume that the starting point on the production function is point A.After an increase in the quantity of capital,there would be a ______________________ which would shift the LRAS curve from LRAS₁ to _______________ resulting in _______________.. A) movement along the production function to point C; LRAS₂; economic growth B) shift upward of the production function to point B; LRAS₂; economic growth C) movement along the production function to point C; LRAS₃; a shrinking economy D) shift upward of the production function to point B; LRAS₃; a shrinking economy

Question

Quizplus · Accepted Answer

An increase in the quantity of capital would shift the production function upward to point B, resulting in an increase in potential output and economic growth. This would shift the LRAS curve from LRAS₁ to LRAS₂.

-Refer to Exhibit 17-3 Assume That the Starting Point on the Production