A fall in labor costs will cause aggregate
A) supply to increase.
B) demand to increase.
C) supply to decrease.
D) demand to decrease.

Name: A fall in labor costs will cause aggregate A) supply to increase. B) demand to increase. C) supply to decrease. D) demand to decrease.
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Question

Quizplus · Accepted Answer

A fall in labor costs will reduce production costs for firms, making it profitable to supply more output at any given price level. This leads to an increase in aggregate supply.

A Fall in Labor Costs Will Cause Aggregate