Figure 15-2

-Refer to Figure 15-2.Ceteris paribus,a decrease in the labor force would be represented by a movement from
A)SRAS₁ to SRAS₂.
B)SRAS₂ to SRAS₁.
C)point A to point B.
D)point B to point A.

Question

Figure 15-2
 
-Refer to Figure 15-2.Ceteris paribus,a decrease in the labor force would be represented by a movement from
A)SRAS₁ to SRAS₂. 
B)SRAS₂ to SRAS₁. 
C)point A to point B. 
D)point B to point A.

Quizplus · Accepted Answer

A decrease in the labor force would lead to a decrease in production capacity and an increase in production costs. This would result in a leftward shift of the short-run aggregate supply curve from SRAS2 to SRAS1.

Figure 15-2 -Refer to Figure 15-2.Ceteris Paribus,a Decrease in the Labor Force