Human capital decisions affect both long-run and short-run aggregate supply.

Question

Quizplus · Accepted Answer

Human capital decisions, such as education and training, can affect the productivity of workers and therefore have an impact on both the short-run and long-run aggregate supply. In the short-run, increased human capital can lead to higher productivity and higher output. In the long-run, it can lead to sustained economic growth and higher potential output.

Human Capital Decisions Affect Both Long-Run and Short-Run Aggregate Supply