The full-employment (FE)line shifts left if
A)labour supply declines.
B)productivity decreases.
C)there is an adverse supply shock.
D)all of the above.

Name: The full-employment (FE)line shifts left if A)labour supply declines. B)productivity decreases. C)there is an adverse supply shock. D)all of the above.
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Question

Quizplus · Accepted Answer

A decline in labor supply, a decrease in productivity, or an adverse supply shock all reduce the economy's capacity to produce goods and services, shifting the FE line to the left.

The Full-Employment (FE)line Shifts Left If