2.2.6 Determinants of long-run aggregate supply
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What LRAS shows

What LRAS shows

AD-AS diagram with downward-sloping AD curve and LRAS shifting right from LRAS1 at Y1 to LRAS2 at Y2, showing higher potential output

Long-run aggregate supply (LRAS) is the maximum sustainable level of real output an economy can produce when resources are fully and efficiently employed. It measures productive potential, not a temporary boom caused by strong spending.

2.2.6 Determinants of long-run aggregate supply Lesson

  1. A Level
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  3. /2.2.6 Determinants of long-run aggregate supply