Suppose that productivity increases as workers' health improves. This increase in productivity will:
A) cause a movement up the short-run aggregate supply curve from left to right.
B) cause a movement down the short-run aggregate supply curve from right to left.
C) shift the short-run aggregate supply curve to the right.
D) shift the short-run aggregate supply curve to the left.

Question

Quizplus · Accepted Answer

As productivity increases due to workers' health improvements, the cost of production decreases, resulting in an increase in the overall supply of goods and services. Therefore, there will be a rightward shift in the short-run aggregate supply curve.

Suppose That Productivity Increases as Workers' Health Improves