Refer to the above figure. Assume that B is the current long-run aggregate supply (LRAS) curve and that E is the current short-run aggregate supply (SRAS) curve.

If a new discovery of large oil fields in Florida led to an increase in the nation’s productive capacities, then we could expect the LRAS curve and the SRAS curve to A) remain B and E.
B) move to A and D.
C) move to C and F.
D) move to A and F.

ANSWER:

C