Macro 5- Short and Long run analysis

• Short run analysis supply Can only shift due to costs of production
• LRAS Total q of goods and services all producers in an economy are willing and able to produce at a range of prices over a given period of time when considered in the long run, That is when all fop are being used efficiently and the economy is operating at full employment.
• Classical LRAS The economy is operating at full employment
• What causes shifts in LRAS? Labour productivity Investment Infrastruture Quantity of labour Competition Discovery of new resources
• Keynes LRAS Keynesian emphasizes possibility of invoulintary unemployment Economy not operating at full employment
• What is the difference between short run and long run growth? Short run growth is a country's increase in GDP whereas long run growth is a country's productive capacity