Figure 8-2
-In Figure 8-2,assume that B is the current long-run aggregate supply curve and that E is the current short-run aggregate supply curve.If there were a discovery of large oil fields in Manitoba,where no one thought oil fields existed,then we could expect the long-run aggregate supply curve and the short-run aggregate supply curve to
A)remain B and E.
B)move to A and D.
C)move to C and F.
D)move to A and F.

Question

Figure 8-2 
-In Figure 8-2,assume that B is the current long-run aggregate supply curve and that E is the current short-run aggregate supply curve.If there were a discovery of large oil fields in Manitoba,where no one thought oil fields existed,then we could expect the long-run aggregate supply curve and the short-run aggregate supply curve to
A)remain B and E. 
B)move to A and D. 
C)move to C and F. 
D)move to A and F.

Quizplus · Accepted Answer

The discovery of large oil fields would likely lead to lower energy costs, increasing the productive capacity of the economy. This would shift both the long-run aggregate supply (LRAS) and the short-run aggregate supply (SRAS) curves to the right, indicating an increase in potential output without causing inflation, which corresponds to option C.

Figure 8-2 -In Figure 8-2,assume That B Is the Current Long-Run Aggregate