A change in the full-employment quantity of labor ___________the short-run aggregate supply curve and___________the long-run aggregate supply curve.
A) shifts; does not shift
B) does not shift; does not shift
C) does not shift; shifts
D) shifts; shifts

Question

Quizplus · Accepted Answer

A change in the full-employment quantity of labor will shift the short-run aggregate supply curve (since it affects input costs) and also shift the long-run aggregate supply curve (since it affects potential output in the long run).

A Change in the Full-Employment Quantity of Labor ___________The Short-Run