LRAS

What does the Long Run Aggregate Supply (LRAS) curve represent in an economy?

• The total supply of goods and services that firms in an economy plan on selling during a specific time period.

• The relationship between the price level and the real GDP that firms are willing to supply in the short run.

• The total production of goods and services that an economy can produce with full employment and fixed technology.

• The maximum price level at which goods and services can be sold in an economy.

What does the Production Possibilities Curve (PPC) illustrate?

• The relationship between the supply and demand of a single product.

• The trade-offs in production volume between two choices.

• The maximum price level for all goods in an economy.

• The relationship between inflation and unemployment.

How is full employment represented on the Long Run Aggregate Supply (LRAS) curve?

• By a point to the left of the LRAS curve.

• By a point on the LRAS curve.

• By a point to the right of the LRAS curve.

• Full employment is not represented on the LRAS curve.

What does a point inside the Production Possibilities Curve (PPC) represent?

• Efficient production.

• Inefficient production.

• Unattainable production.

• Full employment.

What can cause the Long Run Aggregate Supply (LRAS) curve to shift to the right?

• An increase in the price level.

• A decrease in the workforce.

• Technological advancements.

• A decrease in consumer demand.

What does a point outside the Production Possibilities Curve (PPC) represent?

• Efficient production.

• Inefficient production.

• Unattainable production with current resources.

• Full employment of resources.

How does actual unemployment relate to the Long Run Aggregate Supply (LRAS) curve?

• It is represented by a point to the left of the LRAS curve.

• It is represented by a point on the LRAS curve.

• It is represented by a point to the right of the LRAS curve.

• It does not relate to the LRAS curve.

What is the relationship between the Long Run Aggregate Supply (LRAS) curve and the Production Possibilities Curve (PPC)?

• The LRAS curve is derived from the PPC.

• The PPC is a more detailed version of the LRAS curve.

• Both illustrate the concept of full employment but in different contexts.

• There is no relationship between the two.

What does a movement along the Production Possibilities Curve (PPC) indicate?

• A change in the economy's resource base.

• A technological advancement.

• A reallocation of resources between two goods.

• A shift in consumer preferences.

Which of the following would not cause the Production Possibilities Curve (PPC) to shift?

• A change in the amount of available labor.

• A technological improvement in the production of one good.

• A change in consumer preferences.

• An increase in physical capital.