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Figure: AD-AS Model II
-(Figure: AD-AS Model II) Refer to Figure: AD-AS Model II. As the size of the labor force increases over time, the _____ curve will shift to the _____.
A) LRAS; right
B) LRAS; left
C) AD; left
D) AD; right

Question

Use the following to answer questions:
Figure: AD-AS Model II 
-(Figure: AD-AS Model II) Refer to Figure: AD-AS Model II. As the size of the labor force increases over time, the _____ curve will shift to the _____.
A) LRAS; right 
B) LRAS; left 
C) AD; left 
D) AD; right

Quizplus · Accepted Answer

As the size of the labor force increases over time, more goods and services can be produced, leading to an increase in potential output. This shift in the LRAS curve to the right reflects the increase in potential output. The AD curve is not affected by changes in the size of the labor force, therefore choices C and D are incorrect.

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