Which of the following decreases aggregate supply?
A) discoveries of new natural resources
B) an increase in competition
C) an increase in educational attainment
D) a decrease in labor supply

Question

Quizplus · Accepted Answer

A decrease in labor supply means there are fewer workers available, which reduces the amount of goods and services that can be produced, leading to a decrease in aggregate supply. The other answer choices would increase aggregate supply: discoveries of new natural resources would increase the availability of inputs, an increase in competition would encourage firms to innovate and increase efficiency, and an increase in educational attainment would improve the quality of human capital, leading to higher productivity.

Which of the Following Decreases Aggregate Supply