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The document outlines three key factors that shift the output supply curve: changes in the lifetime wealth of consumers, changes in current-period total factor productivity, and changes in the current capital stock. An increase in government spending can decrease lifetime wealth, affecting labor supply and shifting the output supply curve to the right. Additionally, improvements in productivity or capital stock can also lead to an upward shift in the production function and labor demand.

Author

Umang Gupta

Language

EN