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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. ┬а For options a and b and d, the aggregate demand curve shifts to Right.

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