Final answer:
An improvement in productivity will shift the aggregate supply curve to the right, leading to a higher output level and potential downward price pressure.
Step-by-step explanation:
Other things equal, an improvement in productivity will shift the aggregate supply curve to the right. An increase in productivity means that at every price level, producers are able to supply a greater quantity of real GDP, which is represented as a rightward shift in the aggregate supply curve.
Therefore, the correct answer to the student's question is: C) shift the aggregate supply curve to the right.
Productivity improvements can be considered one of the most influential factors causing a shift in the aggregate supply curve, leading to higher output levels and potential downward pressure on price levels.