Author Question: If potential GDP increases, what happens to aggregate supply? Does the LAS curve shift or is there a ... (Read 85 times)

frankwu · **on:** Jun 29, 2018

If potential GDP increases, what happens to aggregate supply? Does the LAS curve shift or is there a movement along the LAS curve? Does the SAS curve shift or is there a movement along the SAS curve?

What will be an ideal response?

Question 2

Refer to Figure 7-1. The efficient equilibrium quantity is ________ thousand vaccinations.

A) 100 B) 200 C) 300 D) >300

briezy · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

If potential GDP increases both long-run aggregate supply and short-run aggregate supply increase and the LAS curve and SAS curve shift rightward.

Answer to Question 2

C