AP Macroeconomics 5.6: PPC and LRAS
Explain why an outward PPC shift corresponds to a rightward LRAS shift and how capital accumulation expands productive capacity.
- Syllabus
- Effective Fall 2025
- Course
- AP Macroeconomics
MOD-1.C—Explain (using graphs as appropriate) how the PPC is related to the long-run aggregate supply (LRAS) curve question 1
[Maximum number: 1]
A country is at full employment and produces two types of goods: consumer goods and capital goods.
Referring to your answer to part (c), will the long-run aggregate supply curve shift to the right, shift to the left, or remain the same? Explain.
1 point:
- One point is earned for stating that the long-run aggregate supply (LRAS) curve will shift to the right and for explaining that capital accumulation will increase.
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