Question

question 37 · 1 point a new batch of college graduates enter the workforce boosting the labor productivity of corporate america. illustrate what occurs to the aggregate supply curve by shifting it in the appropriate direction. provide your answer below: chart showing aggregate supply, aggregate demand, price level, real gdp, and a reset option

Explanation:

Step1: Analyze the Impact of Labor Productivity Increase

When labor productivity (from new college graduates) increases, firms can produce more output at each price level. This affects the short - run aggregate supply (SRAS) or long - run aggregate supply (LRAS). In the short run, an increase in labor productivity will shift the aggregate supply curve to the right.

Step2: Determine the Direction of the Shift

The original aggregate supply curve is the upward - sloping line. To show the increase in aggregate supply due to higher labor productivity, we need to shift this curve to the right (parallel shift, maintaining the same slope). This is because at every given price level, firms are now willing and able to supply more real GDP.

Answer:

The aggregate supply curve (the upward - sloping line labeled "Aggregate Supply") should be shifted to the right. This is done by taking the existing aggregate supply curve and moving it horizontally (or with the same slope) to the right, indicating that at each price level, more real GDP is supplied due to the increase in labor productivity from the new college graduates entering the workforce.