What happens to aggregate supply with a significant increase in immigration?

A significant increase in immigration typically leads to a shift in aggregate supply to the right as the labor supply increases. When more workers enter the economy, there is a larger pool of labor available for businesses. This increased labor supply can help firms produce more goods and services, often at lower costs due to the increased competition for workers, which may help to keep wages from rising excessively.

With a greater workforce, businesses can expand their production capabilities, invest more in capital, and operate more efficiently, which can lead to overall economic growth. The rightward shift in aggregate supply indicates an increase in the total quantity of goods and services that the economy can produce at given price levels. This can also contribute to lower price levels if demand remains constant, illustrating the beneficial effects of a growing labor force on aggregate supply dynamics.