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From course:

Economics A Level (DONEEEEEEE)

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Question:

How can a Shift in the LRAS to the Right affect all 4 Macroeconomic Performance Positively? -Is the opposite True?

Author: go kys



Answer:

-LRAS Increasing can lead to: -Economic Growing to the new LRAS Vertical Line -Employment stays at 100% so no Chance [LRAS means no Spare Capacity, like Unemployment] -Price Level will Fall and thus Balance of Payments [Exports] will be Better off -The Opposite is True. LRAS going Left worsens all 4


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-LRAS Increasing can lead to:
-Economic Growing to the new LRAS Vertical Line
-Employment stays at 100% so no Chance [LRAS means no Spare Capacity, like Unemployment]
-Price Level will Fall and thus Balance of Payments [Exports] will be Better off
-The Opposite is True. LRAS going Left worsens all 4
1 answer(s) in total

Author

go kys
go kys