AP Macroeconomics 3.4: Long-Run Aggregate Supply

Define LRAS as the economy’s full-employment capacity, connect it to the PPC, and identify long-run output and growth patterns.

[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 $\mathrm{Y}_{\mathrm{F}}$

Point 2	The graph must show a vertical long-run aggregate supply (LRAS) curve at equilibrium real output $Y_{1}=Y_{F}$ .	1 point

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MOD-2.F—Define (using graphs as appropriate) the long-run aggregate supply (LRAS) curve question 1