In which of the following situations would the long-run aggregate-supply curve shift right?
A)if the government were to increase the minimum-wage
B)if the government were to make unemployment benefits more generous
C)if the government were to raise taxes on investment spending
D)if the government were to increase immigration

Question

Quizplus · Accepted Answer

Increasing immigration would increase the size of the labor force, which would lead to an increase in potential output and shift the long-run aggregate-supply curve to the right. A) Increasing the minimum wage would increase production costs and decrease potential output, shifting the long-run aggregate-supply curve to the left. B) Making unemployment benefits more generous would reduce the incentive to work and reduce the size of the labor force, leading to a leftward shift in the long-run aggregate-supply curve. C) Raising taxes on investment spending would reduce investment and potential output, causing a leftward shift in the long-run aggregate-supply curve.

In Which of the Following Situations Would the Long-Run Aggregate-Supply