The figure given below shows the aggregate demand and supply curves for the U.S.

Question

The figure given below shows the aggregate demand and supply curves for the U.S. A right ard shift of the aggregate supply curve from AS to AS" is likely to be caused by: Figure 5.4 Price level Potential output AS AS AD Real 6,000 10,000 GDP O an increase in resource prices, improved technology, or an extension of patent protection an appreciation of the dollar, higher inflation in Europe, or a decrease in resource prices. a decrease in resource prices, improved technology, or an extension of patent protection. O a decrease in resource prices, improved technology, or a shortening of patent protection a depreciation of the dollar, higher int nology

Explanation / Answer

Answer:- The aggregate demand and supply curves for the U.S. A rightward shift of the aggregate supply curve from AS to AS' is likely to be caused by

Correct Answer:- A decrease in resource prices; improved technology or a shortening of patent protection

Reason:- The rightward shift in the As curve will result due to decline in inputs, improved technology will increase the production and shortening of patent protection will provide greater chances of using the techniques for greater production. All these will provide an impetus for the supplier to improve the production which will result in greater supply.

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