Long-run aggregate supply will decrease for all of the following reasons EXCEPT
A) reduced money wages.
B) decreased human capital.
C) decrease in the level of full employment.
D) decreased capital.

Question

Quizplus · Accepted Answer

Reduced money wages do not decrease long-run aggregate supply because long-run aggregate supply is determined by the economy's resources, technology, and institutions, not by nominal variables like money wages.

Long-Run Aggregate Supply Will Decrease for All of the Following