Which of the following will cause the long-run aggregate supply curve to shift? I. Changes in the amount of capital
II) Changes in the price level
III) Changes in the money supply
A) I only
B) II only
C) I, II, and III
D) only I and II

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve is determined by factors such as the amount of capital, labor force, and technology, which are all considered to be factors that affect the economy's productive capacity in the long run. Changes in the amount of capital are a factor that will shift the long-run aggregate supply curve. Changes in the price level and the money supply, on the other hand, will only affect the short-run aggregate supply curve.

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