Will each scenario shift the longrun aggregate supply AS cur
Will each scenario shift the long-run aggregate supply (AS) curve, the short-run AS curve, both, or neither?
-New technology improves solar panels so that they are less expensive
-Federal government spending increases
-A hurricane wipes out the orange crop in Florida
-A new oil field is discovered that will provide a six-month supply of oil
-A firm expects to introduce driverless cars within the next five years
Solution
New technology improves solar panels so that they are less expensive - Increase in aggregate supply due to improved technology.
-Federal government spending increases - Increase in aggregate demand due to increase in public expenditure
-A hurricane wipes out the orange crop in Florida - Decrease in aggregate supply due to sudden supply shock
-A new oil field is discovered that will provide a six-month supply of oil - Increase in aggregate supply due to new discovery of oil reserves
-A firm expects to introduce driverless cars within the next five years - It will effect employment rate and not AD -AS.
