74. Which of the following would NOT cause an increase in long-run aggregate sup

Question

74. Which of the following would NOT cause an increase in long-run aggregate supply? a. Technological improvements b. Discovery of natural resources c. Investment in capital d. Increase in the exchange rate 75. What would happen if households drastically cut spending due to poor economic reports, other things constant? a. Aggregate demand would decline b. A negative output gap would occur c. Unemployment would decrease d. All of the above e. A and B above 76. Countercyclical policy are actions designed to a. Reduce the deficit during expansions b. Maintain high employment, stable prices, and economic growth c. Increase exports during recessions d. Any governmental action directed at ensuring political stability

Explanation / Answer

74. C) investment in capital

Investment in capital increases the aggregate demand and not the aggregate supply.

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