Which of the following shifts the short-run aggregate supply curve?
I. changes in the size of the labor force
II. changes in the money wage rate
A) II only
B) both I and II
C) neither I nor II
D) I only

Question

Quizplus · Accepted Answer

I. changes in the size of the labor force can affect the availability of workers and thus impact the short-run aggregate supply curve. An increase in the labor force can shift the curve to the right, while a decrease can shift it to the left.
II. changes in the money wage rate can also affect the short-run aggregate supply curve. An increase in the money wage rate will increase production costs and shift the curve to the left, while a decrease in the wage rate will lower production costs and shift the curve to the right.

Which of the Following Shifts the Short-Run Aggregate Supply Curve