Both short and long-run aggregate supply curves can shift to the right if entrepreneurial activities lower costs of production and expand what can be produced.

Question

Quizplus · Accepted Answer

This is correct. Entrepreneurial activities such as investment in new technology, research and development, and innovation can lead to cost savings and increased efficiency in production. This allows firms to produce more output at lower prices, ultimately shifting both the short and long-run aggregate supply curves to the right.

Both Short and Long-Run Aggregate Supply Curves Can Shift to the Right