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Long Run Aggregate Supply
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Long Run Aggregate Supply
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17. Aggregate Demand and Aggregate Supply Analysis / Long Run Aggregate Supply / Problem 6
Problem 6
Synthesize the effects of a nationwide policy that provides free higher education on the LRAS curve.
A
The LRAS curve remains unchanged, as education does not affect worker productivity.
B
The LRAS curve becomes horizontal, indicating no change in worker productivity.
C
The LRAS curve shifts to the left, as education decreases worker productivity.
D
The LRAS curve shifts to the right, as improved education increases worker productivity.
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