ECONOMICS
AGGREGATE SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Yes, I understand this from the notes
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No, I don’t understand this from the notes
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No, I don’t understand this, as I have not read the notes
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None of the above
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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: -A decrease in capital reduces the amount of resources available in the economy, hence will shift the long-run aggregate supply curve to the left.
Detailed explanation-4: -What causes shifts in SRAS? When the price level changes and firms produce more in response to that, we move along the SRAS curve. But, any change that makes production different at every possible price level will shift the SRAS curve. Events like these are called “shocks” because they aren’t anticipated.