The long-run aggregate supply curve would shift right if the government were to
A)reduce the minimum-wage.
B)make unemployment benefits more generous.
C)raise taxes on investment spending.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Reducing the minimum-wage would lower the cost of production for firms, which in turn would increase the profitability of businesses and encourage them to hire more workers. As a result, this would increase the supply of goods and services in the economy and shift the long-run aggregate supply curve to the right. 
Making unemployment benefits more generous or raising taxes on investment spending would not have a direct effect on the production costs for firms and, therefore, would not shift the long-run aggregate supply curve.

The Long-Run Aggregate Supply Curve Would Shift Right If the Government