Long-Run Aggregate Supply (LRAS) - AP Macroeconomics
Card 1 of 30
Identify the impact of a labor strike on LRAS.
Identify the impact of a labor strike on LRAS.
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No immediate effect on LRAS. Temporary disruption doesn't change long-run productive capacity.
No immediate effect on LRAS. Temporary disruption doesn't change long-run productive capacity.
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Identify the shape of the LRAS curve.
Identify the shape of the LRAS curve.
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Vertical line. Output is fixed regardless of price level changes.
Vertical line. Output is fixed regardless of price level changes.
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What impact does a reduction in regulation have on LRAS?
What impact does a reduction in regulation have on LRAS?
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Shifts LRAS to the right. Fewer restrictions allow more efficient resource allocation.
Shifts LRAS to the right. Fewer restrictions allow more efficient resource allocation.
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Identify the effect of an increase in educational attainment on LRAS.
Identify the effect of an increase in educational attainment on LRAS.
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Shifts LRAS to the right. More skilled workers increase overall productivity.
Shifts LRAS to the right. More skilled workers increase overall productivity.
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Identify the impact of a long-term decline in birth rates on LRAS.
Identify the impact of a long-term decline in birth rates on LRAS.
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Shifts LRAS to the left. Fewer future workers reduces long-term productive capacity.
Shifts LRAS to the left. Fewer future workers reduces long-term productive capacity.
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What impact does an increase in labor productivity have on LRAS?
What impact does an increase in labor productivity have on LRAS?
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Shifts LRAS to the right. Higher output per worker increases total potential production.
Shifts LRAS to the right. Higher output per worker increases total potential production.
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What is the effect of improved education on LRAS?
What is the effect of improved education on LRAS?
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Shifts LRAS to the right. Better skills increase worker productivity and potential output.
Shifts LRAS to the right. Better skills increase worker productivity and potential output.
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What is the long-run effect of an increase in investment on LRAS?
What is the long-run effect of an increase in investment on LRAS?
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Shifts LRAS to the right. Creates capital that permanently increases productive capacity.
Shifts LRAS to the right. Creates capital that permanently increases productive capacity.
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Identify one factor that does not shift the LRAS curve.
Identify one factor that does not shift the LRAS curve.
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Price level. Price changes don't affect the economy's productive capacity.
Price level. Price changes don't affect the economy's productive capacity.
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Identify the long-run effect of a significant technological breakthrough on LRAS.
Identify the long-run effect of a significant technological breakthrough on LRAS.
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Shifts LRAS to the right. Major innovations permanently increase productive potential.
Shifts LRAS to the right. Major innovations permanently increase productive potential.
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What is the effect of an aging population on LRAS?
What is the effect of an aging population on LRAS?
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Potentially shifts LRAS to the left. Older workers may be less productive and retire sooner.
Potentially shifts LRAS to the left. Older workers may be less productive and retire sooner.
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How does a decrease in government spending on infrastructure impact LRAS?
How does a decrease in government spending on infrastructure impact LRAS?
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Shifts LRAS to the left. Poor infrastructure reduces economy-wide productivity.
Shifts LRAS to the left. Poor infrastructure reduces economy-wide productivity.
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How does a significant increase in foreign investment affect LRAS?
How does a significant increase in foreign investment affect LRAS?
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Shifts LRAS to the right. Capital inflows increase investment and productive capacity.
Shifts LRAS to the right. Capital inflows increase investment and productive capacity.
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What is the effect of a decrease in available land on LRAS?
What is the effect of a decrease in available land on LRAS?
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Shifts LRAS to the left. Less available space constrains productive activities.
Shifts LRAS to the left. Less available space constrains productive activities.
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How does a long-term increase in tariffs affect LRAS?
How does a long-term increase in tariffs affect LRAS?
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Potentially shifts LRAS to the left. Trade barriers reduce efficiency and resource allocation.
Potentially shifts LRAS to the left. Trade barriers reduce efficiency and resource allocation.
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What is the effect of improved research and development on LRAS?
What is the effect of improved research and development on LRAS?
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Shifts LRAS to the right. Innovation creates new technologies that boost productivity.
Shifts LRAS to the right. Innovation creates new technologies that boost productivity.
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How does a long-run decrease in investments impact LRAS?
How does a long-run decrease in investments impact LRAS?
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Shifts LRAS to the left. Less capital formation reduces future productive capacity.
Shifts LRAS to the left. Less capital formation reduces future productive capacity.
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What impact does a higher retirement age have on LRAS?
What impact does a higher retirement age have on LRAS?
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Shifts LRAS to the right. Workers remain productive longer, expanding labor supply.
Shifts LRAS to the right. Workers remain productive longer, expanding labor supply.
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Identify the effect of a long-term decline in birth rate on LRAS.
Identify the effect of a long-term decline in birth rate on LRAS.
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Shifts LRAS to the left. Fewer future workers reduces long-term labor supply.
Shifts LRAS to the left. Fewer future workers reduces long-term labor supply.
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How does a decrease in labor participation affect LRAS?
How does a decrease in labor participation affect LRAS?
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Shifts LRAS to the left. Fewer available workers reduces total productive capacity.
Shifts LRAS to the left. Fewer available workers reduces total productive capacity.
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How does an increase in capital goods impact LRAS?
How does an increase in capital goods impact LRAS?
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Shifts LRAS to the right. More tools and machinery increase productive capacity.
Shifts LRAS to the right. More tools and machinery increase productive capacity.
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What is the effect of increased entrepreneurship on LRAS?
What is the effect of increased entrepreneurship on LRAS?
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Shifts LRAS to the right. More business creation increases innovation and efficiency.
Shifts LRAS to the right. More business creation increases innovation and efficiency.
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Identify the impact of a long-term decrease in savings on LRAS.
Identify the impact of a long-term decrease in savings on LRAS.
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Potentially shifts LRAS to the left. Less investment reduces future capital and productive capacity.
Potentially shifts LRAS to the left. Less investment reduces future capital and productive capacity.
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What happens to LRAS if there is an improvement in infrastructure?
What happens to LRAS if there is an improvement in infrastructure?
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Shifts LRAS to the right. Better infrastructure enhances productivity across the economy.
Shifts LRAS to the right. Better infrastructure enhances productivity across the economy.
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What is the effect of increased productivity on LRAS?
What is the effect of increased productivity on LRAS?
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Shifts LRAS to the right. Higher output per worker increases total potential production.
Shifts LRAS to the right. Higher output per worker increases total potential production.
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What is the role of natural resources in determining LRAS?
What is the role of natural resources in determining LRAS?
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More resources shift LRAS right. Greater availability of inputs increases productive potential.
More resources shift LRAS right. Greater availability of inputs increases productive potential.
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What is the long-run effect of increased immigration on LRAS?
What is the long-run effect of increased immigration on LRAS?
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Shifts LRAS to the right. More workers expand the total labor force available.
Shifts LRAS to the right. More workers expand the total labor force available.
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What happens to LRAS when there is a decrease in resources?
What happens to LRAS when there is a decrease in resources?
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Shifts LRAS to the left. Fewer inputs reduce the economy's total productive capacity.
Shifts LRAS to the left. Fewer inputs reduce the economy's total productive capacity.
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How does better healthcare affect LRAS?
How does better healthcare affect LRAS?
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Shifts LRAS to the right. Healthier workforce is more productive and works longer.
Shifts LRAS to the right. Healthier workforce is more productive and works longer.
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What is the effect of a natural disaster on LRAS?
What is the effect of a natural disaster on LRAS?
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Shifts LRAS to the left. Destroys productive capacity and reduces available resources.
Shifts LRAS to the left. Destroys productive capacity and reduces available resources.
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