Long-run Aggregate Supply Curve
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AP Macroeconomics › Long-run Aggregate Supply Curve
The long-run aggregate supply curve is likely to shift to the right when which of the following occurs?
An increase in worker productivity due to technological innovation
A decrease in interest rates due to action by the Federal Reserve
An increase in government spending due to government stimulus
A higher than estimated multipler effect
Explanation
An increase in worker productivity will result in the supply curve shifting, because it results in the economy having more potential output.
The long-run aggregate supply curve is likely to shift to the right when which of the following occurs?
An increase in worker productivity due to technological innovation
A decrease in interest rates due to action by the Federal Reserve
An increase in government spending due to government stimulus
A higher than estimated multipler effect
Explanation
An increase in worker productivity will result in the supply curve shifting, because it results in the economy having more potential output.