Use the following to answer questions:
-(Figure: AD-AS Model II)Refer to Figure: AD-AS Model II.As the size of the labour force increases over time,the _____ curve will shift to the _____.
A) LRAS;right
B) LRAS;left
C) AD;left
D) AD;right

Question

Use the following to answer questions: 
-(Figure: AD-AS Model II)Refer to Figure: AD-AS Model II.As the size of the labour force increases over time,the _____ curve will shift to the _____.
A) LRAS;right 
B) LRAS;left 
C) AD;left 
D) AD;right

Quizplus · Accepted Answer

An increase in the size of the labor force will increase potential output and shift the LRAS curve to the right. This will also lead to an increase in long-run equilibrium output and a decrease in the price level. Therefore, the LRAS curve will shift to the right, and choice A is the correct answer.

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