Sustainable Growth

The video discusses sustainability in economic growth, focusing on the importance of shifts in the long run aggregate supply (LRAS) curve. It explains that sustainable growth is achieved through changes in the quantity and quality of production factors, such as land, labor, capital, and enterprise. The video provides examples of how immigration and investment can lead to shifts in LRAS, resulting in economic growth without an output gap. It emphasizes the need for sustainable growth and the role of investment in achieving it.

What is necessary for achieving permanent changes in real outputs?

• Shifts in long run aggregate supply

• Increased government spending

• Shifts in short run aggregate supply

• Higher consumer demand

Which of the following is NOT a factor that influences long run aggregate supply?

• Education and training

• Changes in consumer preferences

• Immigration policies

• Technological advancements

How can high levels of immigration affect the long run aggregate supply?

• By increasing government debt

• By increasing the quantity of labor

• By decreasing the quantity of labor

• By reducing technological advancements

What is the result of a shift in both long run and short run aggregate supply due to immigration?

• A new equilibrium with no output gap

• Higher inflation rates

• Increased unemployment

• Decreased economic growth

What can lead to an outward shift in aggregate demand?

• Decreased business investment

• Government investment

• Higher interest rates

• Increased consumer savings

How does investment affect long run aggregate supply in the long term?

• It reduces labor force

• It improves productivity

• It has no effect

• It decreases productivity

What is the ideal outcome of shifts in aggregate demand and long run aggregate supply?

• Higher price levels

• Sustainable economic growth

• Reduced real output

• Increased unemployment