Suppose the long-run aggregate supply curve shifts to the right as a consequence of the discovery of more efficient production technologies.Given unchanged aggregate expenditure, this implies a rise in long-run equilibrium output and a decline in the equilibrium price level.

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When the long-run aggregate supply curve shifts to the right, it means that more output can be produced at any given price level. As a result, long-run equilibrium output will increase, and the price level will decrease as firms compete to sell their products. This is consistent with the basic principles of supply and demand. However, it's important to note that this assumes that aggregate expenditure (i.e. total spending in the economy) remains unchanged. If aggregate expenditure were to increase at the same time as the supply curve shifts rightward, the effect on output and prices would be more complicated.

Suppose the Long-Run Aggregate Supply Curve Shifts to the Right