Which of the following can lead to an increase in aggregate supply?

An increase in aggregate supply occurs when the overall production capacity of the economy enhances, allowing for a greater quantity of goods and services to be produced at all price levels. Technological advancements are a key driver of such growth. They improve productivity by enabling firms to produce more efficiently, often reducing production costs and enhancing the quality of output. As companies upgrade their processes, harness new technologies, or innovate new products, they can expand their supply capabilities, leading to an increase in the aggregate supply curve.

In the context of the other choices, increased government spending typically affects aggregate demand rather than supply. Higher interest rates can discourage investment and consumption, which might hinder supply. Similarly, decreased consumer spending primarily impacts demand rather than the productive capabilities of the economy. Therefore, technological advancements are distinctively powerful in fostering growth in aggregate supply by enhancing the productive efficiency of the economy.