Question

Suppose a developing country receives more machinery and capital equipment as foreign entrepreneurs increase the amount of investment in the economy. As a result, ______

Answer 1

Answer:

the long run aggregate supply curve will shift to the right

Explanation:

              The aggregate supply curve determines the quantity of actual Gross Domestic Product or the GDP that is supplied by the economy at various price levels. It is most commonly known as the AS curve.

               In order words it is the total services or goods that any firm or an organisation is ready to sell to a country in an economy at a given price.

               When a foreign investment increases in a developing country, In the long run, the investment increases the economy's capacity to produce more goods in the long run, which will shifts the long run aggregate supply curve to the right.

Hence the answer is --

the long run aggregate supply curve will shift to the right