Long-run aggregate supply will increase for all of the following reasons except
A)a fall in the money wage rate.
B)an increase in human capital.
C)the introduction of new technology.
D)an increase in the full-employment quantity of labour.
E)an increase in the quantity of capital.

Question

Quizplus · Accepted Answer

A fall in the money wage rate does not increase long-run aggregate supply because it does not affect the economy's potential output. Long-run aggregate supply is determined by factors like technology, human capital, and resources, not by wage rates.

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