An economy is seeking to shift its long-run aggregate supply curve from LRAS1 LRAS_1\,LRAS1 to LRAS2LRAS_2LRAS2, as shown in the diagram below:
Which of the following correctly identifies a market-based supply-side policy and explains how it achieves this shift?
An increase in state funding for regional vocational training colleges, which increases human capital and reduces structural unemployment.
Deregulation of product markets to lower barriers to entry, which increases competition and drives efficiency gains.
A reduction in the central bank’s base interest rate, which lowers the cost of borrowing for firms and shifts the ADADAD curve to the left.
The implementation of a higher national minimum wage to increase work incentives, which lowers production costs for firms and shifts the short-run aggregate supply (SRASSRASSRAS) curve to the right.
