Over time in a growing economy,the long-run aggregate supply curve will
A)move so as to match the short-run aggregate supply curve.
B)shift outward to the right.
C)shift inward to the left.
D)become increasingly steep.

Question

Quizplus · Accepted Answer

As the economy grows, there are increases in productivity, technology, capital investment, and labor force. This leads to an increase in potential output, causing the long-run aggregate supply to shift outward to the right.

Over Time in a Growing Economy,the Long-Run Aggregate Supply Curve