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    Question

    In the context of the Classical model, which of the following would cause a shift in the long-run aggregate supply curve (LRAS)?

    A An increase in the money supply Correct Answer Incorrect Answer
    B An improvement in technology Correct Answer Incorrect Answer
    C An increase in consumer spending Correct Answer Incorrect Answer
    D A decrease in the price level Correct Answer Incorrect Answer

    Solution

    LRAS will only shift because of either increase in productivity/ improvement in technology.   For options a and b and d, the aggregate demand curve shifts to Right.

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