Th2.3: Shift of LRAS curve Flashcards
1
Q
What does a shift of the LRAS to the right mean?
A
that economies are able to produce more and is the same as an outward shift of the PPF
2
Q
There are a number of ways this can be achieved, most of these involving…
A
increasing productivity which means more goods can be produced with the same resources or increasing resources which allow more goods to be produced
3
Q
As with SRAS, there can be…
A
supply-side shocks to the LRAS curve e.g huge technological advancement of war
4
Q
What are the six factors that influence long run AS?
A
technological advances changes in relative productivity changes in education and skills changes in government regulations demographic changes and migration competition policy
