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 the quantity of capital.
C)an increase in human capital.
D)the introduction of new technology.
E)an increase in the full- employment quantity of labour.

Question

Quizplus · Accepted Answer

A fall in the money wage rate would cause a movement along the existing long-run aggregate supply curve, not a shift of the curve itself. Therefore, it would not cause an increase in long-run aggregate supply. The other options listed would increase the economy's capacity to produce goods and services in the long run, and therefore cause a shift of the long-run aggregate supply curve to the right.

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