What happens to the economic growth when aggregate supply increases?

When aggregate supply increases, it generally leads to a decrease in inflation. An increase in aggregate supply means that the economy can produce more goods and services, which often results in a greater availability of products in the market. This increase in supply puts downward pressure on prices because there are more options available for consumers, which can lead to lower inflation rates.

As the production expands, it can also create more jobs, thereby potentially increasing employment levels, although this isn't directly addressed in the chosen answer. Additionally, an increased aggregate supply does not negatively impact the labor force participation rate; instead, it can encourage more people to enter the workforce as economic opportunities expand.

Thus, the impact of increasing aggregate supply is typically a reduction in inflation due to greater availability of goods and services, which makes option A the most suitable choice.