Explain whether each of the following events will increase, decrease, or have no effect on long-run aggregate supply. a. The United States experiences a wave of immigration. b. Congress raises the minimum wage to $15 per hour. c. Intel invents a new and more powerful computer chip. d. A severe hurricane damages factories along the East Coast.

Question

Business

Evan Lam

11 July, 10:27

Explain whether each of the following events will increase, decrease, or have no effect on long-run aggregate supply. a. The United States experiences a wave of immigration. b. Congress raises the minimum wage to $15 per hour. c. Intel invents a new and more powerful computer chip. d. A severe hurricane damages factories along the East Coast.

+5

Answers (1)

Know the Answer?

Rodolfo Hurley · Answer 1

The explanation below

Explanation:

The Long-Run Aggregate Supply (LAS) represents the relationship between the price level and output in the long-run.

a.) United states experience a wave of immigration

Long run aggregate supply tend to increase by expanding the labour supply by relaxing immigration rules to overcome ageing working population and form mobility of labor.

b. Congress raises the minimum wage to $ 15 per hour.

LRAS tends to increase as by expanding the labour supply by improving work incentives.

c. Intel invest a new and more powerful chip.

LRAS tends to increases as it Stimulate invention and innovation to promote lower costs and improvements in the dynamic efficiency of markets. Innovation creates new goods and services and encourages investment.

d. A severe hurricane damages factories along the east coast

LRAS decreases as large-scale natural disasters and persistent political conflicts including civil wars can also have a significant effect on a country's productive potential and therefore affect the LRAS.