How would raising unemployment benefits and reducing the motivation to work affect the aggregate supply curve?

Show Answers

Cause the aggregate supply curve to move rightwardCause the aggregate supply curve to move leftwardCause the aggregate demand curve to shift rightwardCause the aggregate demand curve to shift leftwardNo significant effect on aggregate supply or demand

Explanation

Increasing unemployment benefits and lowering the incentive to work typically leads to a higher willingness to supply labor, which shifts the aggregate supply curve to the right. This reflects an increase in production capacity or willingness to produce at every price level.