According to www.oecd.org, the United States spends a larger portion of expenditures on higher education compared to any other country. Increasing the amount of higher education produces
I. rightward shifts in the U.S. long-run aggregate supply curve.
II. movements up along the U.S. aggregate demand curve.
III. increases in U.S. human capital.
A) I and III only
B) I, II and III
C) II and III only
D) III only

Question

Quizplus · Accepted Answer

Increasing the amount of higher education in the United States leads to a rightward shift in the U.S. long-run aggregate supply curve due to an increase in productivity and efficiency, and it also results in increases in U.S. human capital by enhancing skills and knowledge. These effects do not directly cause movements up along the U.S. aggregate demand curve, which are typically driven by factors like increases in consumer spending, government spending, or investment, not by changes in the supply side factors like education.

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