Which of these 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

Increases in long-run aggregate supply (LRAS) are typically caused by improvements in productivity, technology, human capital, and factors that enhance economic efficiency. Options A, B, and C directly contribute to these improvements. However, D, a reduction in poverty through income redistribution, primarily affects demand rather than the productive capacity of the economy, and thus does not directly increase LRAS.

Which of These Would NOT Cause an Increase in Long-Run