The correct option for a shift of the long-run
Answer to Problem 7MCQ
Option b is correct.
Explanation of Solution
Explanation for the correct option:
b.
Using the
Therefore, option b is correct.
Explanation for incorrect options:
a.
An increase in aggregate
c.
If the economy’s capital stock is decreased, it is not certainly decreasing the long-run supply causing LARS to shift leftward. Therefore, option c is an incorrect answer.
d.
Investment in infrastructure may increase real
e.
Since all options are not correct. Therefore, option e is incorrect.
Long-run aggregate supply curve: As per the long-run aggregate supply curve, the aggregate output supplied remains unchanged even if the aggregate price level is increased or decreased.
Chapter 40 Solutions
Krugman's Economics For The Ap® Course
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