1. Discuss what factors shift the LRAS curve to the right (what increases long run aggregate supply). 2. Explain the following shifts by using the LRAS-AD diagram : a) Increase in both equilibrium real GDP and price level. b) A decrease in equilibrium real GDP and an increase in price level.

1. Discuss what factors shift the LRAS curve to the right (what increases long run aggregate supply). 2. Explain the following shifts by using the LRAS-AD diagram : a) Increase in both equilibrium real GDP and price level. b) A decrease in equilibrium real GDP and an increase in price level.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 8SCQ: Suppose Mexico, one of our largest trading partners and purchaser of a large quantity of our...

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Question

1. Discuss what factors shift the
LRAS curve to the right (what
increases long run aggregate
supply).
2. Explain the following shifts by
using the LRAS-AD diagram :
a) Increase in both equilibrium
real GDP and price level.
b) A decrease in equilibrium real
GDP and an increase in price
level.

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