Figure 24-2

-Refer to Figure 24-2.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 24-2
 
-Refer to Figure 24-2.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 potential output, which shifts the short-run aggregate supply (SRAS) curve to the left. Therefore, the movement in the graph would be from SRAS₂ to SRAS₁.

Figure 24-2 -Refer to Figure 24-2.Ceteris Paribus,a Decrease in the Labor Force