The Long-Run Aggregate Supply Curve Will Shift to the Right

question 45

Multiple Choice

The long-run aggregate supply curve will shift to the right if

• A)the economy experiences technological change.
• B)there is a decrease in population.
• C)the economy experiences high levels of inflation.
• D)net exports decrease.

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Definitions:

Classical School

A branch of economic thought that emphasizes the importance of market forces in determining economic outcomes and the self-regulating nature of the economy.

Great Depression

A severe and prolonged global economic downturn that occurred in the 1930s, marked by massive unemployment and deflation.

Laissez-Faire

The philosophy that the private economy should function without any government interference.

Classical Theory

An economic theory proposing that free markets can regulate themselves through the relationship of supply and demand without government intervention.