ECONOMICS
AGGREGATE SUPPLY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
The multiplier
|
|
|
The output gap
|
|
|
Real national output
|
|
|
The institutional structure of the economy
|
Detailed explanation-1: -The long run aggregate supply curve (LRAS) is determined by all factors of production – size of the workforce, size of capital stock, levels of education and labour productivity. If there was an increase in investment or growth in the size of the labour force this would shift the LRAS curve to the right.
Detailed explanation-2: -Aggregate demand is the sum of four components: consumption, investment, government spending, and net exports.
Detailed explanation-3: -The assortment of aggregate supply determinants fall into three categories (1) resource quantity–the amounts of labor, capital, land, and entrepreneurship available, (2) resource quality–the productivity of the four factors of production, and (3) resource price–the prices of the inputs used in production.
Detailed explanation-4: -There are four major determinants of economic growth: human resources, natural resources, capital formation and technology, but the importance that researchers had given each determinant was always different.