Technological advances:
A)Shift only the short run aggregate supply curve to the right.
B)Shift only the long run aggregate supply curve to the right.
C)Shift both short run and long run aggregate supply curves to the right.
D)Do none of the above

Question

Technological advances:
A)​Shift only the short run aggregate supply curve to the right.
B)​Shift only the long run aggregate supply curve to the right.
C)​Shift both short run and long run aggregate supply curves to the right.
D)​Do none of the above

Quizplus · Accepted Answer

Technological advances increase the productivity of firms and reduce their costs of production, which leads to an increase in both short run and long run aggregate supply. Therefore, the correct choice is C, which states that technological advances shift both short run and long run aggregate supply curves to the right.

Technological Advances