Edexcel IAL Economics 2.3.3.3b factors influencing LRAS
Practise LRAS factors by drawing productivity-led shifts and linking demographics or supply-side policy to long-run growth.
- Syllabus
- First assessment 2019
- Course
- Economics YEC11
- Level
- AS
Exam points
- Draw an LRAS shift from a productivity fall, showing price level and real output changes.
- Choose a supply-side policy likely to shift LRAS right and explain the capacity link.
- Analyse how demographic change can constrain labour supply and long-run growth.
2.3.3.3b - Factors influencing LRAS. Changes in: • the state of technology • productivity • question 1
[Maximum number: 4]
Between 2022 and 2023, Australia's productivity fell by 3.7%. Draw an LRAS and AD diagram to show the impact of this change in productivity on the average price level and real output.
Knowledge 1, Application 3
Quantitative skills assessed:
QS4: Construct and interpret a range of standard graphical forms
QS9: Interpret, apply and analyse information in written, graphical and tabular forms.
Knowledge
1 mark for drawing original AD and LRAS curves with correctly labelled axes
Application
Up to 3 marks for the following information on the diagram:
- Leftward shift of LRAS (1)
- Lower real output; mark not awarded for 'quantity' (1)
- Higher price level; mark not awarded for 'price' (1)
NB Accept either Keynesian or Classical LRAS curves
NB Depending on the level of spare capacity shown on the diagram, using a Keynesian LRAS curve price level and real output may decrease or stay the same
(4)
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