If an improvement in the quality of education in the United States increases the productivity of labor, this will
A) increase aggregate demand and decrease aggregate supply.
B) increase short-run aggregate supply and reduce aggregate demand.
C) decrease aggregate demand and increase short-run aggregate supply.
D) increase both long-run and short-run aggregate supply.

Question

Quizplus · Accepted Answer

An improvement in the quality of education leads to a more skilled and productive workforce, which increases both the long-run and short-run aggregate supply. In the long run, an increase in aggregate supply leads to economic growth, while in the short run, it reduces costs and can increase output. This would not affect aggregate demand, as it is determined by other factors such as consumer spending, investment, and government policies.

If an Improvement in the Quality of Education in the United