Multiple Choice
Brent,a brilliant inventor,found a way to grind up discarded newspapers and create a new,far lower-cost,effective plaster.What effect would this innovation have on aggregate supply?
A) If it is able to replace existing products with its superior characteristics, it will shift SRAS to the right and LRAS to the right.
B) If it is able to substantially lower the costs of home insulation products, it would shift SRAS to the right but not change the LRAS.
C) By reducing the demand for existing plaster, it would have no net effect on the SRAS but shift LRAS left.
D) By providing a readier market to use discarded papers, it would reduce disposal costs for many producers and thereby shift SRAS to the left, leaving LRAS unchanged.
Correct Answer:

Verified
Correct Answer:
Verified
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