Question

Which of the following shifts both the short-run and long-run aggregate supply right?

a. an increase in the actual price level

b. an increase in the expected price level

c. an increase in the capital stock

d. None of the above is correct.

Answer 1

Answer:

d. None of the above is correct.

Explanation:

a ) An increase in the actual price level shifts  the short -run aggregate supply right .

b ) An increase in the expected price level decreases the aggregate supply ie it will shift the short -run aggregate supply line towards the left .

c ) An increase in the  capital stock shifts the long-run aggregate supply towards the right because movement of capital is for long term purposes .

d ) So , none of the above is correct .