The long-run aggregate supply curve would shift right if the government were to
A)increase the minimum-wage.
B)make unemployment benefits more generous.
C)raise taxes on investment spending.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

None of the given options would cause the long-run aggregate supply curve to shift right. Increasing the minimum wage and making unemployment benefits more generous would increase costs for businesses, while raising taxes on investment spending would decrease investment and potentially decrease productivity. None of these factors would increase the economy's capacity to produce goods and services in the long-run, which is what would cause a shift in the long-run aggregate supply curve to the right.

The Long-Run Aggregate Supply Curve Would Shift Right If the Government