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.

Question

Quizplus · Accepted Answer

The increase in machinery and capital equipment will lead to an increase in the economy's productive capacity. This means that the economy will be able to produce more goods and services in the long run, shifting the long-run aggregate supply curve to the right.

Suppose a Developing Country Receives More Machinery and Capital Equipment