Long Run Aggregate Supply

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Last updated 5:02 PM on 4/8/26
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4 Terms

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What is LRAS?

It represents the potential capacity of an economy’s factors of production

maximum sustainable output an economy can produce when all resources (labor, capital, technology) are fully employed.

2
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What shifts the LRAS?

Any change in the quantity or quality of a factor of production.

3
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What does an outward shift of the LRAS represent?

An increase in the productive capacity.

4
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What determinants may shift the LRAS outward (right)?

Technological advances

Increase in education and skills