2.3.3 - Long - Run AS

Question 1

What Is The LRAS Influenced By?

Answer 1

A change in the productive potential of the economy.

Question 2

Describe The Keynesian LRAS
(3 Points)

Answer 2

~ Between X and Y, there is spare capacity, as output is low.

~ Between Y and Z, is the bottleneck, as output is increasing and resources begin to run out.

~ At point Z, there is full employment, the economy is using all resources.

Question 3

What Causes Shifts In The LRAS?

Answer 3

Improvements in the productive efficiency of the economy and Q2 CELL.