If the economy is at full employment and the LAS curve shifts to the right because of,say,an increase in labour force participation rate,then which of the following will result?
A)The AS curve will also shift to the right and full employment will be maintained.
B)The AS curve will also shift to the right but a recessionary gap will result.
C)The AS curve will shift to the left and full employment will be maintained.
D)The AS curve will not be affected.
E)The AS curve may or may not shift depending on what happens to the wage rate.

Question

Quizplus · Accepted Answer

The Answer of If the economy is at full employment and the LAS curve shifts to the right because of,say,an increase in labour force participation rate,then which of the following will result?
A)The AS curve will also shift to the right and full employment will be maintained.
B)The AS curve will also shift to the right but a recessionary gap will result.
C)The AS curve will shift to the left and full employment will be maintained.
D)The AS curve will not be affected.
E)The AS curve may or may not shift depending on what happens to the wage rate.

If the Economy Is at Full Employment and the LAS