Long Run Aggregate Supply Curve and Factors Affecting it

The video tutorial explains the differences between short run and long run aggregate supply curves, emphasizing the factors that cause these curves to shift. It highlights the concept of full employment and real output, and discusses how changes in the quantity and quality of factors of production, such as land, labor, capital, and enterprise, can lead to shifts in the long run aggregate supply curve. The tutorial concludes with a summary and encourages viewers to explore further topics, including the Keynesian view on aggregate supply.

What is the primary focus when distinguishing between long run and short run aggregate supply curves?

• Consumer preferences

• Factors of production

• Price levels

• Government policies

Why is the long run aggregate supply curve considered perfectly inelastic?

• It depends on price levels

• It fluctuates with consumer trends

• It is affected by short-term demand

• It is independent of price

What does full employment real output signify?

• Only capital is fully utilized

• Only labor is fully utilized

• All available factors of production are used

• All resources are unemployed

What causes a shift in the long run aggregate supply curve?

• Changes in international trade

• Changes in the quantity and quality of factors of production

• Changes in government policy

• Changes in consumer demand

How can the quantity of land as a factor of production change?

• Through land reclamation

• Through changes in consumer preferences

• Through technological advancements

• Through government subsidies

What impact does education and training have on the labor force?

• It only affects capital

• It has no impact

• It improves the quality of the labor force

• It decreases the labor force

Which factor is NOT a cause of shifts in the long run aggregate supply curve?

• Increased investment

• Immigration

• Changes in consumer preferences

• Technological advancements

What is the effect of increased investment on the long run aggregate supply?

• It decreases the quantity of capital

• It has no effect

• It only affects short-term supply

• It improves the quantity of capital

How can the quality of entrepreneurial skills be enhanced?

• Through government training and support

• By reducing immigration

• By limiting education

• By increasing taxes

What is emphasized as crucial for understanding aggregate supply shifts?

• International trade

• Differences between long run and short run factors

• Government policies

• Consumer demand