Which factor would likely increase aggregate supply?

An increase in labor productivity is a significant factor that enhances aggregate supply. When labor productivity rises, workers can produce more goods and services in the same amount of time, leading to a more efficient economy. This improvement can stem from various sources, such as better technology, improved training or education, and enhanced work processes.

As productivity increases, the cost of production per unit typically decreases, which allows businesses to offer more goods at lower prices, effectively shifting the aggregate supply curve to the right. This shift indicates that at any given price level, the economy can produce a higher quantity of goods and services. Consequently, this stimulates economic growth and can lead to higher employment levels as firms expand to meet increased demand.

In contrast, factors like consumer spending, the wage rate, or interest rates may have more indirect or varying effects on aggregate supply, primarily affecting aggregate demand instead. For instance, while higher consumer spending can encourage businesses to produce more in the short term, it does not inherently increase the economy's productive capacity. Similarly, while rising wage rates could increase costs and potentially decrease supply if they outpace productivity gains, interest rates primarily influence investment and spending decisions rather than directly increasing supply.