In countries that have high minimum wages and require a lengthy and costly process to get permission to open a business,
A)reducing either the minimum wage or the time and cost to open a business would have no effect on the long-run aggregate supply curve.
B)reducing the minimum wage and the time and cost to open a business would both shift the long-run aggregate supply curve to the right.
C)reducing the minimum wage would shift long-run aggregate supply to the right.Reducing the time and cost to open a business would have no affect on the long-run aggregate supply curve.
D)reducing the minimum wage would have no affect on the long-run aggregate supply curve.Reducing the time and cost to open a business would shift the long-run aggregate supply curve to the right.

Question

Quizplus · Accepted Answer

Reducing the minimum wage can increase employment by making it less costly for businesses to hire workers, potentially increasing output. Reducing the time and cost to open a business can encourage more business formation and competition, also potentially increasing output. Both actions can shift the long-run aggregate supply curve to the right, indicating an increase in the potential output of the economy.

In Countries That Have High Minimum Wages and Require a Lengthy