When would the long-run aggregate-supply curve shift right?
A) when immigration increases or the government makes a substantial increase in the minimum wage
B) when immigration decreases or the government abolishes the minimum wage
C) when immigration increases or the government abolishes the minimum wage
D) when immigration decreases or the government makes a substantial increase in the minimum wage

Question

Quizplus · Accepted Answer

An increase in immigration would lead to an increase in the number of workers in the economy, which would increase the economy's potential output and shift the long-run aggregate supply curve to the right. Additionally, if the minimum wage were abolished, firms' costs of production would decrease, leading to an increase in potential output and a rightward shift in the long-run aggregate supply curve.

When Would the Long-Run Aggregate-Supply Curve Shift Right