ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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an increase in the nominal wage rate of labour.
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an increase in foreign direct investment.
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an increase in the education level of the general public.
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an enhancement in production technology.
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Detailed explanation-1: -An increase in the production factors causes the curve to shift to the right, while a decline in the production factors will lead to a leftward shift. The primary production factors that cause the changes in the LRAS curve include labor productivity levels, workforce size, capital size, and education levels.
Detailed explanation-2: -Answer and Explanation: To shift the long-run aggregate supply curve to the right, you must increase the potential output of an economy assuming it is using all resources available.
Detailed explanation-3: -long-run aggregate supply (LRAS) a curve that shows the relationship between price level and real GDP that would be supplied if all prices, including nominal wages, were fully flexible; price can change along the LRAS, but output cannot because that output reflects the full employment output.
Detailed explanation-4: -Which would NOT cause the LRAS to shift right or left? Changes in inflation do not lead to changes in the LRAS.