Question

China’s working-age population is expected to decline in the next 20 years. In the long run, we can expect this to: Choose one: A. increase long-run aggregate supply. B. decrease long-run aggregate supply. C. increase aggregate demand. D. increase short-run aggregate supply. E. decrease aggregate demand.

Answer 1

Answer:

The correct option is B

Explanation:

The long run supply curve is a curve which is vertical at the output level which is potential. The potential level of the output is produced by using all the resources which are available in the economy.

And it changes when the labor resource, change in technology or the capital changes. So, decrease in the labor force decreases the labor resources and with that the potential level of output in the economy decreases.