A sudden increase in immigration would be considered a:
A)short-run supply shock.
B)long-run supply shock.
C)interest-rate shock.
D)A change in immigration would not affect any of these.

Question

Quizplus · Accepted Answer

A sudden increase in immigration would have long-run effects on the economy as it would increase the supply of labor, affecting the labor market's equilibrium wages and affecting other macroeconomic variables in the long run, such as economic growth and potential output. It would not be considered a short-run supply shock, as it would take time for the effect to fully manifest, and it is not related to interest rate shocks.

A Sudden Increase in Immigration Would Be Considered A