According to the real business cycle model,a rightward shift in the long-run aggregate supply schedule would be caused by ________.
A)a negative supply shock
B)an increase in aggregate demand
C)a positive supply shock
D)a decrease in aggregate demand

Question

Quizplus · Accepted Answer

According to the real business cycle model, a positive supply shock, such as an increase in productivity or a decrease in input costs, would cause a rightward shift in the long-run aggregate supply schedule. A negative supply shock or a change in aggregate demand would not directly affect the long-run aggregate supply schedule.

According to the Real Business Cycle Model,a Rightward Shift in the Long-Run