The long-run aggregate supply curve:
A) is affected by the price level.
B) never moves.
C) shifts right when the economy experiences economic growth.
D) shifts left when the economy experiences economic growth.

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve is not affected by the price level and does not move in the short-run. However, it can shift to the right when the economy experiences economic growth, due to factors such as increases in productivity or improvements in technology. It can also shift to the left if there are decreases in productivity or negative supply shocks.

The Long-Run Aggregate Supply Curve