Th2.3: ^^ Changes in Gov Regulations

Question 1

Size of workforce

Answer 1

they can increase the size of the workforce - this will shift LRAS because it means there are more resources in the economy and so more can be produced

Question 2

Research and development

Answer 2

if a business is able to come up with a good idea, it will increase the LRAS as it will improve productivity

Question 3

Entrepreneurship

Answer 3

make it easier to set up businesses and increase incentives to be entrepreneurial (e.g lower corporation tax) which would increase companies, jobs and output so increase LRAS

Question 4

Regulation

Answer 4

high regulation on businesses will limit LRAS as it will increase costs and the time taken to undertake tasks, which will reduce output