Which of the following would NOT cause an increase in long-run aggregate supply?
A) an increase in government expenditures on infrastructure
B) a free trade agreement that significantly reduces previous trade barriers
C) an increase in the average education level in the labor force
D) a reduction in poverty due to new income redistribution programs

Question

Quizplus · Accepted Answer

A reduction in poverty due to income redistribution programs does not directly increase the productive capacity of the economy, unlike the other options which enhance factors of production or efficiency.

Which of the Following Would NOT Cause an Increase in Long-Run