2.3 - Aggregate Supply Flashcards
1
Q
Difference between SRAS and LRAS
A
SRAS is when at least one of the factors of production is fixed and LRAS is when all of the factors of production are variable
1
Q
What 3 factors influence SRAS
A
- Changes in cost of raw materials
- Changes in exchange rates
- Changes in tax rates such as corporation tax
2
Q
What factors can influence LRAS (there are 6 in total)
A
- Technological advancements
- Changes in productivity
- Education and training
- Changes in government regulations
- Migration
- Competition policy changes
