3.3 Long-Run Aggregate Supply

Question 1

What is LRAS?

Answer 1

Represents maximum total output when all factors of production are fully and efficiently utilised

Question 2

Main factors affecting LRAS?

Answer 2

1) Productivity
2) Labour Market
3) Innovation + Investment
4) Resources

Question 3

Evaluating effects of labour migration?

Answer 3

• Types of people and their skills
• Gains in innovation
• Long-term vs temporary

Question 4

Evaluating automation?

Answer 4

• Improved quality
• Increased productivity
• Lower costs
• Job losses
• Large initial expenditure
• Risk of hacking