Increases in the quality of inputs that do not affect the quantity of those inputs shift both LAS and SAS rightward.

Question

Quizplus · Accepted Answer

When there is an increase in the quality of inputs, it leads to an increase in productivity. This increase in productivity shifts both LAS (long-run aggregate supply) and SAS (short-run aggregate supply) curves rightward as the economy can produce more output with the same amount of inputs. Hence, the statement is true.

Increases in the Quality of Inputs That Do Not Affect