Exhibit 10A-5 Macro AD-AS Model

Economic growth is represented in Exhibit 10A-5 by:

Question

Exhibit 10A-5 Macro AD-AS Model

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Economic growth is represented in Exhibit 10A-5 by:

Quizplus · Accepted Answer

Economic growth is represented by a rightward shift in the long-run aggregate supply curve (LRAS) as the economy's potential output increases due to factors such as increases in capital or technological advancements. A leftward shift in the LRAS would indicate a decrease in potential output, while an inward shift of the production possibilities curve would indicate a decrease in the economy's ability to produce both goods and services. Movement along the LRAS curve would indicate changes in price levels, not economic growth.