Which of the following would cause the long-run aggregate supply curve to shift to the left?
A) an increase in wages
B) a decrease in aggregate demand
C) a decrease in labor productivity
D) a decrease in taxes on profits

Question

Quizplus · Accepted Answer

A decrease in labor productivity would cause a shift to the left in the long-run aggregate supply curve, as it represents a decrease in the economy's ability to produce goods and services over the long term. An increase in wages (A) and a decrease in taxes on profits (D) would shift the curve to the right, as they would increase the incentives for firms to produce more output. A decrease in aggregate demand (B) would shift the short-run aggregate supply curve to the left, but would not have a long-run effect.

Which of the Following Would Cause the Long-Run Aggregate Supply