Which of the following is most likely to increase long-run aggregate supply in an economy?
A)A decrease in the size of the labor force
B)A deterioration in the quality of the labor force
C)A reduction in the cost of using computers
D)An increase in the price level
E)An increase in aggregate demand

Question

Quizplus · Accepted Answer

A reduction in the cost of using computers would likely lead to an increase in productivity and technological advancements, which would increase the efficiency of production and lead to an increase in long-run aggregate supply. Options A and B would decrease the size and quality of the labor force, respectively, which would decrease long-run aggregate supply. Option D would decrease the incentive to produce and invest, leading to a decrease in long-run aggregate supply. Option E would increase short-run aggregate supply, but not necessarily long-run aggregate supply.

Which of the Following Is Most Likely to Increase Long-Run