If there is a permanent increase in the production function

If there is a permanent increase in the production function that shifts the aggregate supply curve by 20 units to the right, then so long as there is no change in the expected profit stream of projects, the cost of projects, or uncertainty of the future profit change, consumption will increase by  units.

Solution

20 units because the gap will arise when there is change in the expected profit stream of projects, the cost of projects, or uncertainty of the future profit change.

If there is a permanent increase in the production function that shifts the aggregate supply curve by 20 units to the right, then so long as there is no change

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