What is the result if the economy receives an influx of new workers from immigration? a. The economy will move down along the long-run aggregate supply curve. b. The long-run aggregate supply curve will shift to the right. c. The long-run aggregate supply curve will shift to the left. d. The economy will move up along the long-run aggregate supply curve.
Question
What is the result if the economy receives an influx of new workers from immigration?
a. The economy will move down along the long-run aggregate supply curve.
b. The long-run aggregate supply curve will shift to the right.
c. The long-run aggregate supply curve will shift to the left.
d. The economy will move up along the long-run aggregate supply curve.
Solution
The correct answer is b. The long-run aggregate supply curve will shift to the right.
Here's why:
The long-run aggregate supply (LRAS) curve represents the total amount of goods produced by an economy at a given overall price level in a time period when all prices are fully flexible. It's determined by the economy's productive resources: labor, capital, and technology.
When the economy receives an influx of new workers from immigration, the labor force increases. This means the economy has more resources to produce goods and services, which increases the potential output of the economy.
As a result, the LRAS curve shifts to the right, indicating an increase in potential output at the same price level.
Similar Questions
If Australia experiences an enormous surge of immigration, we could predict it would _________ the supply of labour and shift the supply curve _____.Question 1Select one:A.Decrease; to the left.B.Decrease; to the right.C.Increase; to the left.D.Increase; to the right.
When the economy experiences a permanent positive supply side shock that shifts the long-run aggregate supply to the right, the short run aggregate supply curve: Question 2Select one:A.Will begin by shifting left, and then be pulled right by the long-run aggregate supply over time.B.None of these adjustments will occur.C.Will gradually shift right until it reaches long-run aggregate supply and the new long-run equilibrium.D.Will instantly shift right with the long-run aggregate supply to the new long-run equilibrium.
If more workers leave Australia to seek out better opportunities in another country than new workers arriving into Australia, then this will: a. Shift the short-run aggregate supply curve of Australia to the left. b. Shift the short-run aggregate supply curve of Australia to the right. c. Move the Australian economy down along a stationary short-run aggregate supply curve. d. Move the Australian economy up along a stationary short-run aggregate supply curve.
Assume the economy is initially operating at the natural level of output. Which of the following events will initially cause a shift of the aggregate supply curve?Question 5Select one:a.an increase in the price targetb.an increase in government spendingc.a decrease in the money supplyd.an increase in taxese.None of the above.
We know the long-run aggregate supply curve in the AD-AS model can shift. Which of the following situations will not result in a shift of the LRAS curve? The interruption of production due to a cyclone. Automation which improves productivity. An influx of highly skilled workers through immigration. Changes in the endowment of natural resources. Changes in technology levels.
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