Which of the following would most likely increase aggregate supply in an economy?

• A. A technological advancement that improves production efficiency
• B. A decrease in the labor force participation rate
• C. An increase in the minimum wage
• D. A rise in corporate taxes

Answer: (A)

Verified step by step guidance

1. Step 1: Understand that aggregate supply (AS) represents the total quantity of goods and services that producers in an economy are willing and able to supply at different price levels.
2. Step 2: Recognize that factors which increase production efficiency or reduce production costs tend to shift the aggregate supply curve to the right, indicating an increase in aggregate supply.
3. Step 3: Analyze each option: a technological advancement that improves production efficiency reduces costs and increases output, thus increasing aggregate supply.
4. Step 4: Note that a decrease in labor force participation reduces the available labor, which would likely decrease aggregate supply, shifting it left.
5. Step 5: Understand that increases in minimum wage or corporate taxes raise production costs, which typically decrease aggregate supply by shifting the curve to the left.