Which of the following would not cause a shift in the long-run aggregate supply curve ?
Correct answer: D. An increase in price expectations
- A. All of these answers shift the long-run aggregate supply curve
- B. An increase in the available capital
- C. An increase in the available labour
- D. An increase in price expectations
Explanation
An increase in price expectations affects short-run aggregate supply, not productive capacity, so it does not shift long-run aggregate supply. Capital and labour are factors of production and therefore shift the economy’s long-run capacity.
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