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AP Macroeconomics Mod 2 F Define Using Graphs As Appropriate the Long Run Aggregate Supply Lras Curve Questions

Define LRAS as full-employment productive capacity, place its vertical curve on AD-AS graphs, and explain shifts caused by capital formation.

Syllabus
Effective Fall 2022
Course
AP Macroeconomics

Exam points

  • draw or identify a vertical LRAS curve at full-employment output YF on an AD-AS graph
  • place YF left of, right of or at short-run equilibrium to represent the economy's output gap
  • explain why fully flexible long-run wages and input prices make LRAS vertical at potential output
  • explain how investment and capital formation shift LRAS by changing potential output

AP Macroeconomics Mod 2 F Define Using Graphs As Appropriate the Long Run Aggregate Supply Lras Curve Questions question 1

[Maximum number: 1]

Assume that Nepal is in long-run macroeconomic equilibrium and has an open economy.

Draw a correctly labeled graph of the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves for Nepal, and show each of the following.

The full-employment output, labeled YF\mathrm{Y}_{\mathrm{F}}

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