When a production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis,a rise in labor ________________________which shifts the LRAS curve ____________ resulting in ______________________.
A) shifts the production function up; rightward; economic growth
B) shifts the production function down; leftward; a shrinking economy
C) moves us up along a given production function; rightward; economic growth
D) moves us down along a given production function; leftward; a shrinking economy

Question

Quizplus · Accepted Answer

Moving up along a given production function due to an increase in labor represents an increase in output, which shifts the Long-Run Aggregate Supply (LRAS) curve rightward, indicating economic growth.

When a Production Function Is Graphed with Real GDP on the Vertical