AP Macroeconomics Question 9: Answer and Explanation
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4. Long-run aggregate supply is most likely to increase as the result of
- A. an increase in the real interest rate
- B. increased investment in capital
- C. an increase in aggregate demand
- D. an increase in the unemployment rate
- E. an increase in the exchange rate
Correct Answer: B
B Long-run aggregate supply increases when industry can produce more. This can happen if the country invests in equipment (i.e., capital). Therefore the answer is (B).