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Question
In the above figure, starting at E3, if there is an increase in technology that causes a permanent increase in production capabilities
A) aggregate supply would shift to SRAS0 and LRAS1 would shift to LRAS0.
B) aggregate supply would shift to SRAS1 and LRAS0 would shift to LRAS1.
C) aggregate supply would shift to SRAS2 and LRAS0 would shift to LRAS1.
D) aggregate supply would shift to SRAS1 and then return to SRAS0.
Answer
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