Long-run aggregate supply will decrease for all of the following reasons EXCEPT
A) decreased capital.
B) reduced money wages.
C) decreased human capital.
D) decrease in the level of full employment.

Question

Quizplus · Accepted Answer

Reduced money wages will increase the profitability of firms, which will lead to an increase in the long-run aggregate supply. Decreased capital, decreased human capital, and a decrease in the level of full employment will decrease the long-run aggregate supply.

Long-Run Aggregate Supply Will Decrease for All of the Following