An increase in government spending growth will cause the LRAS curve to:

Question

Quizplus · Accepted Answer

The Long-Run Aggregate Supply (LRAS) curve represents the potential output level of an economy given structural factors such as technology, capital equipment, and natural resources. Government spending growth typically affects the short-run aggregate supply (SRAS) curve but not the LRAS curve. Therefore, an increase in government spending growth will not cause any shifts in the LRAS curve, and it will remain unchanged.

An Increase in Government Spending Growth Will Cause the LRAS