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    Hi, I'm stuck on this question. It says that the answer is A. However, I do understand why it could be A - we were taught that a reduction in price increases AS. However, we were also taught that an increase in the labour force increases AS also? Making B a viable answer also?
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    (Original post by Alex-Torres)
    Hi, I'm stuck on this question. It says that the answer is A. However, I do understand why it could be A - we were taught that a reduction in price increases AS. However, we were also taught that an increase in the labour force increases AS also? Making B a viable answer also?
    Short run aggregate supply is affected by a change in the business cost. (decrease in oil prices)

    Increase in employment will increase the capacity of the economy and hence sifts the LRAS!
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    (Original post by dan94adibi)
    Short run aggregate supply is affected by a change in the business cost. (decrease in oil prices)

    Increase in employment will increase the capacity of the economy and hence sifts the LRAS!
    Ohhh, thank you very much, kind sir.
 
 
 
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