Which of the following would cause the long-run aggregate supply curve to shift to the right?
A) An increase in wages
B) An increase in demand
C) An increase in productivity
D) An increase in taxes on profits

Question

Quizplus · Accepted Answer

An increase in productivity would cause a rightward shift in the long-run aggregate supply curve as it represents an increase in the economy's capacity to produce goods and services. This would lead to lower costs and higher output levels, resulting in an upward shift in the LRAS curve. The other options (A, B, and D) are likely to cause a leftward shift in the LRAS curve as they represent increases in costs or decreases in the economy's capacity to produce.

Which of the Following Would Cause the Long-Run Aggregate Supply