4.3.7 Determinants of long-run aggregate supply

• The long-run aggregate supply (LRAS) is influenced by factors that increase the economy's productive
• What is one factor affecting LRAS?

  Productivity improvements
• How does capital investment impact LRAS?

  Increases productive capacity
• What happens to the LRAS curve if a country invests in advanced automation technology?

  Shifts to the right
• Unlike SRAS, LRAS is not influenced by changes in price
• Technology enhances LRAS by reducing labor costs.


  True
• R&D investment leads to new technologies
• What does integrating new technologies achieve for an economy?

  Rightward shift in LRAS
• Unlike SRAS, LRAS is not influenced by changes in price
• What does the long-run aggregate supply (LRAS) represent?

  Total goods and services
• The LRAS is influenced by changes in price levels.

  False
• Technology advancements increase production capabilities
• Growth in labor force size shifts the LRAS to the left.

  False
• Match the factor affecting LRAS with its example:

  Technology advancements ↔️ Automation in manufacturing

  Capital investment ↔️ Building new transport networks

  Labor force growth ↔️ More skilled workers entering the job market

  Productivity improvements ↔️ Factories streamlining operations
• How does automation impact productivity in manufacturing?

  Reduces manual errors
• Digital infrastructure improves communication and data handling across sectors.


  True
• Match the technological aspect with its benefit:

  Automation ↔️ Increased productivity

  R&D Investment ↔️ Development of new products

  Digital Infrastructure ↔️ Improved data handling
• What is the definition of productivity in LRAS terms?

  Efficiency in production processes
• What is the impact of capital investment on LRAS?

  Expands productive capacity
• What does a rightward shift in the LRAS curve indicate?

  Higher productive capacity
• Automating manufacturing processes reduces manual errors
• A larger capital stock enhances an economy's productive capacity
• What is an example of infrastructure development that improves LRAS?

  High-speed internet services
• What does long-run aggregate supply (LRAS) represent?

  Total goods and services
• Productivity improvements in production processes are a key factor affecting LRAS
• Investing in advanced automation technology shifts LRAS to the right
• Technology improves efficiency and fosters innovation
• Integrating new technologies shifts the LRAS curve to the right.

  True
• What does capital stock refer to in economics?

  Physical capital assets
• How does modern equipment contribute to higher productivity?

  Increases output per worker
• What is the role of labor supply in LRAS?

  Affects productive capacity
• An increase in labor supply shifts the LRAS curve to the right
• Factories streamlining operations to reduce waste is an example of increased productivity.


  True
• Growth in the labor force increases potential output
• How does technology enhance output efficiency?

  Through automation
• R&D investment improves production capabilities by developing new technologies.


  True
• What is capital stock in economics?

  Total physical capital assets
• Modern equipment increases output per worker, leading to higher productivity.


  True
• The LRAS is influenced by changes in price levels.

  False
• LRAS is influenced by changes in price levels.

  False