Figure 13-2 -Refer to Figure 13-2.Ceteris paribus,a decrease in the capital stock would be represented by a movement from A)SRAS₁ to SRAS₂. B)SRAS₂ to SRAS₁. C)point A to point B. D)point B to point A.

Question

Quizplus · Accepted Answer

A decrease in the capital stock would shift the long-run aggregate supply (LRAS) curve leftward, as shown by the movement from SRA₂ to SRA₁. This results in lower potential output levels at any given price level, represented by the shift from point A to point B.

Figure 13-2 -Refer to Figure 13-2.Ceteris Paribus,a Decrease in the Capital Stock