Asked by Richy Amato on May 27, 2024

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An increase in the federal minimum wage will shift the long-run aggregate supply curve to the left.

Federal Minimum Wage

The lowest legal wage that can be paid to workers in the United States, set by federal law.

Long-run Aggregate Supply

The total production of goods and services in an economy at full employment, assuming no changes in technology and resources.

  • Identify the elements influencing the shift in the long-term aggregate supply curve and understand their effects on the economy.
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JG
Jackie GibbsJun 01, 2024
Final Answer :
True
Explanation :
An increase in the federal minimum wage will increase production costs for businesses, leading to a decrease in their profits. In the long run, this will result in a decrease in the capital stock as businesses will reduce their investment in new equipment and technologies. As a result, the long-run aggregate supply curve will shift to the left.