Increases in the quality of inputs that do not affect the quantity of those inputs increase long-run aggregate supply but not short-run aggregate supply.

Question

Quizplus · Accepted Answer

Increases in the quality of inputs improve productivity, which can shift both the long-run aggregate supply (LRAS) and short-run aggregate supply (SRAS) curves to the right, as they enhance the economy's capacity to produce goods and services without necessarily changing the quantity of inputs.

Increases in the Quality of Inputs That Do Not Affect