Which of the following would shift the LRAS curve to the right?
A)a decline in the size of the labor force
B)a reduction in the quality of the labor force
C)a reduction in the cost of using computers
D)an increase in the price level
E)an increase in aggregate demand

Question

Quizplus · Accepted Answer

A reduction in the cost of using computers would increase productivity and efficiency in the economy, leading to an increase in potential output and shifting the LRAS curve to the right. A decline in the size of the labor force (A) or a reduction in the quality of the labor force (B) would decrease potential output and shift the LRAS curve to the left. An increase in the price level (D) would have no effect on the LRAS curve, as it represents potential output at any given price level. An increase in aggregate demand (E) would shift the SRAS curve to the right, but not the LRAS curve.

Which of the Following Would Shift the LRAS Curve to the Right