The following is a list of economic events:
1.A big cut in the price of imported oil.
2.An increase in the money supply.
3.An increase in labour productivity.
4.A decline in the GDP of the USA
5.A big rise in nominal wages.
-Refer to the information above to answer this question.Which of the listed economic events will cause an increase in both the aggregate supply and in the LAS curve?
A)1 only
B)2 only
C)3 only
D)5 only

Question

Quizplus · Accepted Answer

An increase in labor productivity will lead to an increase in aggregate supply, as it allows for more output to be produced with the same amount of inputs. This will also cause a shift to the right in the long-run aggregate supply (LAS) curve, as it represents the potential output of an economy. None of the other listed events will cause an increase in both aggregate supply and the LAS curve.

The Following Is a List of Economic Events