An increase in inflation will cause the long-run aggregate supply curve to:
A) shift inward.
B) shift outward.
C) not shift at all.
D) shift randomly.

Name: An increase in inflation will cause the long-run aggregate supply curve to: A) shift inward. B) shift outward. C) not shift at all. D) shift randomly.
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Question

Quizplus · Accepted Answer

The long-run aggregate supply curve represents the economy's potential output at full employment and is not affected by the price level, so it does not shift due to changes in inflation.

An Increase in Inflation Will Cause the Long-Run Aggregate Supply