Question

The following graph shows the short-run and long-run aggregate supply curves (SRAS and LRAS) for an economy. Suppose there is a technological improvement that allows firms to reduce their costs of production permanently. Drag one or both of the curves on the graph to illustrate the long-term effects of this change. If you don't believe there will be any long-term effects, leave the curves where they are. LRAS SRAS SRAS LRAS REAL GDP (Trillions of dollars) Assuming aggregate demand is not affected by the technological improvement, the long-run effect of this is on aggregate output and the price level. Supply shock

          The following graph shows the short-run and long-run aggregate supply curves (SRAS and LRAS) for an economy. Suppose there is a technological improvement that allows firms to reduce their costs of production permanently. Drag one or both of the curves on the graph to illustrate the long-term effects of this change. If you don't believe there will be any long-term effects, leave the curves where they are.

LRAS
SRAS
SRAS
LRAS
REAL GDP (Trillions of dollars)

Assuming aggregate demand is not affected by the technological improvement, the long-run effect of this is on aggregate output and the price level.

Supply shock

Added by Karen S.

Question

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