Within the AD/AS model, an increase in capital formation that permits the economy to achieve a larger output will
a. increase long-run aggregate supply.
b. increase short-run aggregate supply, but long-run aggregate supply will be unaffected.
c. increase aggregate demand.
d. decrease aggregate demand.
A
Economics
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What determines the slope of the aggregate supply curve is
A. how much more the economy can produce without any change in the price level. B. how fast the output level changes after a technological advance. C. how fast the price of factors of production respond to changes in the price level. D. none of the above.
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