Question

Suppose that the U.S. concrete industry has developed an inexpensive way to make concrete both lighter and stronger. As a result, the full employment level of aggregate output has grown from level A to level B in the graph. Move the SRAS (short‑run aggregate supply), AD (aggregate demand), or LRAS (long‑run aggregate supply) curves to describe how this concrete technology innovation has affected the U.S. economy.

Answer 1

*see image*

Step-by-step explanation:

The full‑employment level of aggregate output has grown from level A to level B. As such, LRAS shifts to the right from level A to level B.

An advance in technology equates with an increase in productivity. As a result, it increases the economy's ability to produce goods and services. In this case, better concrete lowers the cost of buildings, roads, and sidewalks. Consequently, the long‑run aggregate‑supply curve shifts to the right. It may help to think about being able to produce more buildings for the same amount of money.

Since most people may not even notice a difference in the concrete, the aggregate demand stays constant (i.e., does not shift).