The long-run aggregate supply curve would shift left if the amount of labor available
A)increased or Congress made a substantial increase in the minimum wage.
B)decreased or Congress abolished the minimum wage.
C)increased or Congress abolished the minimum wage.
D)decreased or Congress made a substantial increase in the minimum wage.

Question

Quizplus · Accepted Answer

In the long run, the amount of labor available is considered to be a determinant of the economy's potential output. If the amount of labor available decreases, the long-run aggregate supply curve shifts left because there are fewer workers available to produce goods and services. Similarly, if Congress makes a substantial increase in the minimum wage, firms may find it more expensive to hire workers, and the long-run aggregate supply curve will shift left. Hence, the correct answer is D.

The Long-Run Aggregate Supply Curve Would Shift Left If the Amount