long run growth logic chain

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6 Terms

1
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pt 1

an increase in gov spending on education and training is an interventionist supply side policy

2
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pt 2

education and training improves the skills of the labour force for example giving relevant skills on use of technology such as AI

3
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pt 3

this improves the workers’ output per hour, this can lead to improvements in productivity and human capital

4
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pt 4

with a more skilled and educated workforce there has been an improvement in labour as a factor of production

5
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pt 5

therefore the LRAS curve shifts to the right indicating an increase in the economy’s potential output

6
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pt 6

the end result is long run growth which is an increase in the economy’s productive potential