LRAS Curve ( Relevant book notes)

The long run A.S curve represents the economies maximum/potential level of GDP when all resources are fully employed.
In the LRAS, firms have the ability to adjust their activities to maximise costs of production.

LRAS Curve.excalidraw The LRAS is vertical, it represents the maximum level of output at a particular point in time.

Determinants of the LRAS’s position §

• The size of the population The number of households buying goods; Potential size of the workforce
• Participation in the work-force
• The productivity that can be influenced by stock of capital equipment / state of technology

Shifts in the LRAS Curve §

Transclude of block shifts-in-the-vertical-position

TERP acronym for shifts in the SRAS Curve

Influences Shifts in the LRAS Curve (TERP) §

Improvements in Technology

• Increases in Efficiency
• Increaases in Resources
• Immigration (Population)