The aggregate supply curve will shift to the right when the:
A) amount of labor in the society decreases.
B) capital stock of the society shrinks.
C) amount of natural resources in the society gets smaller.
D) amount of labor in the society increases.
E) price level in the economy rises.

Question

Quizplus · Accepted Answer

An increase in the amount of labor in the society will increase the potential output of goods and services, causing the aggregate supply curve to shift to the right. A decrease in the amount of labor or other inputs will lead to a shift to the left. Therefore, choice D is the best option as it describes a situation where the aggregate supply curve shifts to the right.

The Aggregate Supply Curve Will Shift to the Right When