A rise in labour productivity will MOST likely result in a(n):
A) increase in aggregate demand.
B) decrease in aggregate demand.
C) decrease in aggregate supply.
D) increase in aggregate supply.

Question

Quizplus · Accepted Answer

A rise in labour productivity would reduce the cost of production, leading to a decrease in the prices of goods and services. This would cause an increase in aggregate supply, shifting the supply curve to the right. As a result, it would lead to lower prices and a higher output, boosting economic growth. Therefore, the correct choice is D, increase in aggregate supply.

A Rise in Labour Productivity Will MOST Likely Result in A(n)