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Indicate whether each of the following events will increase, decrease, or have no effect on long-run aggregate supply (LRAS). Event: Intel invents a new and more powerful computer chip.

1) Increase LRAS
2) Decrease LRAS
3) No effect on LRAS

User Micbobo
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1 Answer

6 votes

Final answer:

An invention of a new and more powerful computer chip by Intel would increase the long-run aggregate supply as it represents a technological advancement that boosts productivity and economic growth. option a.

Step-by-step explanation:

When Intel invents a new and more powerful computer chip, this would likely increase long-run aggregate supply (LRAS). An improvement in technology, such as a more efficient computer chip, enhances productivity. This kind of technological innovation allows firms to produce more goods at every price level, leading to a rightward shift in the LRAS curve, signaling economic growth. It demonstrates how advancements in technology are a pivotal determinant of aggregate supply, particularly in the long run where the economy's productive capabilities are concerned.

User Mukeshkumar
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