ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The aggregate supply curve shifts to the right as productivity increases or the price of key inputs falls, making a combination of lower inflation, higher output, and lower unemployment possible.

Detailed explanation-2: -The aggregate supply curve will shift out to the right as productivity increases. It will shift back to the left as the price of key inputs rises, and will shift out to the right if the price of key inputs falls.

Detailed explanation-3: -A positive change in supply when demand is constant shifts the supply curve to the right, which results in an intersection that yields lower prices and higher quantity. A negative change in supply, on the other hand, shifts the curve to the left, causing prices to rise and the quantity to decrease.

Detailed explanation-4: -What causes the long run aggregate supply curve to shift? Factors that shift the long-run aggregate supply include labor changes, capital changes, natural resources, and technology changes.

Detailed explanation-5: -Supply shifters include (1) prices of factors of production, (2) returns from alternative activities, (3) technology, (4) seller expectations, (5) natural events, and (6) the number of sellers. When these other variables change, the all-other-things-unchanged conditions behind the original supply curve no longer hold.