Question

Which of the following is specifically designed to increase the long run aggregtae suply curve?

a) increasing taxes on entrepreneurs.
b) increasing government spending on welfare.
c) developing new technologies.
d) raising marginal tax rates on income.

Answer 1

Answer: c) developing new technologies.

Step-by-step explanation:

The Long Run Aggregate Supply (LRAS) curve can only change if the productivity in the Economy changes. One of the ways this can happen is through the use of newer better technology.

The better technology will make production more efficient by producing more goods at a lesser cost which lead to an increase in the GDP potential of the country which is a shift in the LRAS.