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: -The Keynesian long run aggregate supply curve (LRAS) has a bendy L-shape. It has three parts: spare capacity, bottleneck and full employment.
Detailed explanation-2: -What causes the long run aggregate supply curve to shift? Factors that shift the long-run aggregate supply include labor changes, capital changes, natural resources, and technology changes.
Detailed explanation-3: -Keynesian long run aggregate supply curve Keynesians believe that at low levels of output and employment, there would be spare capacity in the economy which would enable firms to increase their output without increasing the cost per unit produced. Here the LRAS curve will be horizontal.
Detailed explanation-4: -A typical AS curve has three parts: a flat, horizontal portion at low levels of output, a middle section with a more-or-less gentle upward slope, and a steep or vertical portion at high levels of output.