Suppose new immigration legislation permanently limits the number of people who are able to enter the country through H1-B visas. Which type of shock would this legislation cause?
A) Long-run supply shock
B) Short-run supply shock
C) Demand shock
D) Change in price level

Question

Quizplus · Accepted Answer

This legislation would cause a long-run supply shock because it permanently affects the potential labor force and productivity by limiting the number of skilled workers who can enter the country, thereby impacting the economy's capacity to produce goods and services in the long run.

Suppose New Immigration Legislation Permanently Limits the Number of People