The Long-Run Aggregate Supply (LRAS) curve is vertical
Advancements in technology increase the productive capacity of the economy.
The LRAS curve represents the long-run, while the SRAS curve represents the short run.
A shift in the LRAS curve to the right indicates an increase in the economy's productive capacity.
Match the LRAS and SRAS curves with their characteristics:
LRAS ↔️ Vertical, determined by productive capacity
SRAS ↔️ Upward-sloping, affected by input prices
Match the relationship to the price level with the corresponding supply curve:
LRAS ↔️ Quantity of real GDP supplied is independent of price level
SRAS ↔️ Quantity of real GDP supplied depends on price level
Order the factors that determine the position of the LRAS curve:
1️⃣ Labor force
2️⃣ Capital stock
3️⃣ Technology
The LRAS curve is independent of the price
Input prices are a key determinant of the SRAS curve
True
The productivity of the labor force influences the LRAS curve
True
A decrease in the labor force shifts the LRAS curve to the left
True
Increased technology can improve the quality of capital stock
True
Order the factors that determine the position of the LRAS curve:
1️⃣ Labor force
2️⃣ Capital stock
3️⃣ Technology
The labor force is a key factor that determines the position of the LRAS curve
True
The SRAS curve depends on the price level
True
What are the three key factors that determine the position of the LRAS curve?
Labor force, capital stock, technology
Match the LRAS and SRAS curves with their characteristics:
LRAS curve ↔️ Vertical
SRAS curve ↔️ Upward-sloping
Order the three primary factors that determine the LRAS curve's position:
1️⃣ Labor Force
2️⃣ Capital Stock
3️⃣ Technology
Increased quality of physical capital enhances the economy's productive capacity.
The LRAS curve is vertical, while the SRAS curve is upward-sloping.
The LRAS curve is vertical, while the SRAS curve is upward-sloping
True
The labor force is a key factor that determines the position of the LRAS curve
True
Match the curve characteristic with the correct supply curve:
LRAS ↔️ Vertical
SRAS ↔️ Upward-sloping
What is the shape of the SRAS curve?
Upward-sloping
What does the LRAS curve represent in the long run?
Potential output
What are the three primary factors that determine the LRAS curve?
Labor, capital, technology
A shift in any of the LRAS determinants independently affects the price level
The LRAS curve reflects the economy's productive capacity in the long run
True
Match the curve characteristic with the correct supply curve:
LRAS ↔️ Vertical
SRAS ↔️ Upward-sloping
Input prices and production costs determine the position of the SRAS curve
The LRAS curve helps policymakers focus on strategies to enhance productive capacity
The LRAS curve is vertical because the quantity of real GDP supplied depends on the price level in the long run.
False
The SRAS curve is upward-sloping because some input prices are fixed in the short run.
True
The quantity of real GDP supplied on the LRAS curve is independent of the price level.
True
A larger labor force always leads to a rightward shift of the LRAS curve.
True
The SRAS curve is upward-sloping because input prices are fixed in the short run.
True
The Short-Run Aggregate Supply (SRAS) curve is upward-sloping, reflecting the relationship between the price level and the quantity of real GDP supplied in the short run when some input prices are fixed
The Long-Run Aggregate Supply (LRAS) curve represents the relationship between the price level and the quantity of real GDP supplied in the long
What type of slope does the SRAS curve have?
Upward-sloping
Technological advancements can shift the LRAS curve to the right