ECONOMICS
AGGREGATE SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Yes, I understand this from the notes
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No, I don’t understand this from the notes
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No, I don’t understand this, as I have not read the notes
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None of the above
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Detailed explanation-1: -As technology advances, then the cost of production decreases that increases production, and it shifts the short-run aggregate supply curve. Also, technological advancement boosts productivity, causing the long-run aggregate supply curve to shift rightward.
Detailed explanation-2: -Aggregate Demand Shock Technological advances can make labor more productive and increase business returns on capital. This is normally caused by declining costs in one or more sectors, leaving more room for consumers to buy additional goods, save, or invest.
Detailed explanation-3: -Though the shape of both the long-run and short-run aggregate supply curves will remain the same, changes in corporate investment can shift the entire curve to the left or right. When corporate investment increases, both aggregate supply curves shift to the right.
Detailed explanation-4: -Answer and Explanation: An advance in technology does not affect the long-run aggregate supply curve. It means the short-run aggregate supply curve increases due to advancement in technology and it decreases the price level and increases the quantity in an economy.