An increase in labor's productivity will cause the SRAS curve to shift __________ and the price level to __________.
A) leftward; increase
B) rightward; decrease
C) rightward; increase
D) leftward; decrease

Question

Quizplus · Accepted Answer

An increase in labor's productivity makes production more efficient, shifting the Short-Run Aggregate Supply (SRAS) curve rightward, which typically leads to a decrease in the price level due to the increased supply of goods and services.

An Increase in Labor's Productivity Will Cause the SRAS Curve