Question

The​ long-run aggregate supply curve will shift to the right if the economy: A. experiences high levels of inflation. B. net exports decrease. C. experiences technological change. D. has a decrease in population.

Answer 1

Answer:

Option (C) is correct.

Explanation:

A change in technological process is a key determinant of supply. If there is any change in the technological process will shift the short run and long run supply curve.

Now, suppose that there is an advancement of technology. This will increase the productivity of the inputs and therefore, the level of output increases at the same level of resources. This change in output will increase the supply of the product and hence, there is a rightward shift in the short run and long run supply curve.