Any Permanent Change in the Quantity of Any Factor of Production

question 28

True/False

Any permanent change in the quantity of any factor of production available - capital,technology,land,or labor - can cause a shift in both the long-run and short-run aggregate supply curves.

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Definitions:

Supply-Side Effect

Economic effects that result from changes in production capacity and costs, influencing the aggregate supply in the economy.

Tax Rates

The percentage at which an individual or corporation is taxed, applied to income or transactions.

Potential GDP

The highest level of economic output that an economy can sustain over the long term without increasing inflation.

Capital Spending

Expenditure by businesses on physical assets like buildings, machinery, and equipment to enhance their capacity or efficiency.