Policies that focus on education
A) will affect aggregate supply immediately.
B) are examples of an automatic stabilizer.
C) are not examples of a supply-side fiscal policy initiative.
D) will shift the long-run aggregate supply curve to the left over time.
E) increase effective labor resources and thus increase aggregate supply over time.

Question

Quizplus · Accepted Answer

Policies that focus on education increase the human capital of workers, leading to higher productivity and effective labor resources. Over time, this leads to an increase in aggregate supply. However, it may not have an immediate effect and is not an automatic stabilizer. It is also not necessarily a supply-side fiscal policy initiative, as it does not typically involve changes in taxes or subsidies. It does not shift the long-run aggregate supply curve to the left, but rather to the right.

Policies That Focus on Education