aggregate supply Flashcards
1
Q
two types of AS curve
A
keynesian
classical
2
Q
classical LRAS curve
A
vertical line
3
Q
what will shift AS curve
A
changes in costs of production
changes in wages, taxes, efficiency levels
supply side shocks eg war, natural disaster
4
Q
what affects LRAS curve
A
factors of production - increase/decrease in capacity
this is affected by investment, technological advancements, improvement in education/skills, promoting enterprise, demographic changes
5
Q
explain keynesian LRAS curve shape
A
perfectly elastic first because spare capacity, but as time goes on becomes inelastic as maximum capacity is reached
