To anyone who can help!
Does an expansion in the workforce affect an economy's LRAS curve? I know that any change in factors of production (land, labor, entrepreunership, capital) can cause a shift but does an expansion in the workforce imply an increase in factor of production labor ?
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Economics Question! Macro - Cyclical Unemployment watch
- Thread Starter
- 09-05-2015 16:41
- 09-05-2015 19:36
An expansion in the workforce implies the quantity of labour has increased, so yes.
- 09-05-2015 19:45
Yes, as himynameiswill said, increasing the workforce is increasing the supply of labour.
If you think of it on the PPF diagram, it's going to cause a rightward shift as there are more resources which can be employed, which translates into a rightward shift of the LRAS.