-In the above figure, B is the current long-run aggregate supply curve and E is the current short-run aggregate supply curve. If there is an increase in the full-employment quantity of labor, then the long-run aggregate supply curve and the short-run aggregate supply curve
A) remain B and E.
B) shift to A and D, respectively.
C) shift to C and F, respectively.
D) remain at B and shift at F, respectively.

Question

-In the above figure, B is the current long-run aggregate supply curve and E is the current short-run aggregate supply curve. If there is an increase in the full-employment quantity of labor, then the long-run aggregate supply curve and the short-run aggregate supply curve
A) remain B and E. 
B) shift to A and D, respectively. 
C) shift to C and F, respectively. 
D) remain at B and shift at F, respectively.

Quizplus · Accepted Answer

An increase in the full-employment quantity of labor increases both the potential output and the short-run production capabilities of the economy. This results in a rightward shift of both the long-run aggregate supply curve (to C) and the short-run aggregate supply curve (to F), reflecting higher levels of output at full employment and in the short run, respectively.

-In the Above Figure, B Is the Current Long-Run Aggregate