2.3.3 - LRAS

Cards (4)

  • In the long run there will be a limit on how much supply can be increased.
  • Classical long - run curve
  • The classical view point on the LRAS curve is that it is inelastic. The classical view suggests that real GDP is determined by supply-side factors – the level of investment, the level of capital and the productivity of labour 
  • Keynesian LRAS curve