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The long run aggregate supply curve shows:
The relationship in the long run between the price level and the quantity of real GDP supplied
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The increase in trend or potential GDP, illustrated by an outward shift in a country’s long run aggregate supply curve (LRAS)
Define Long term economic growth
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Over time in a growing economy, the long run aggregate supply curve will
shift outward to the right
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the long run aggregate supply curve is vertical because in the long run,
changes in the price level do not affect potential GDP, as potential GDP depends on the size of the labor force, capital stock and technology
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Why is the long run aggregate supply curve vertical?
In the long run, real GDP is always at potential and is unaffected by price level (on y-axis)
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On the long run aggregate supply curve,
an increase in price level has no effect on the aggregate quantity of GDP supplied
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Describe the slope of the long run aggregate supply curve:
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