A candidate for political office announces the following policies which,she says,economics clearly demonstrates will lead to higher output in the long run: 1.increase immigration from abroad 2.make trade more open between the US and other countries.
A)1 and 2 both shift long-run aggregate supply right.
B)1 and 2 both shift long-run aggregate supply left.
C)1 shifts long-run aggregate supply right,2 shifts long-run aggregate supply left.
D)1 shifts long-run aggregate supply left,2 shifts long-run aggregate supply right.

Question

Quizplus · Accepted Answer

Increasing immigration leads to a larger labor force and potentially higher productivity, both of which can shift the long-run aggregate supply curve to the right. Making trade more open allows for access to more resources and can lead to specialization, also potentially shifting the long-run aggregate supply curve to the right. Therefore, both policies would lead to higher output in the long run and shift the long-run aggregate supply curve to the right.

A Candidate for Political Office Announces the Following Policies Which,she