Exhibit 14A-5 Macro AD-AS Model Economic growth is represented in Exhibit 14A-5 by a:
A) leftward shift in the long-run aggregate supply curve (LRA
S).
B) inward shift of the production possibilities curve.
C) rightward shift in the long-run aggregate supply curve (LRA
S).
D) movement along the long-run aggregate supply curve (LRA

Question

Exhibit 14A-5  Macro AD-AS Model  Economic growth is represented in Exhibit 14A-5 by a:
A) leftward shift in the long-run aggregate supply curve (LRA
S). 
B) inward shift of the production possibilities curve. 
C) rightward shift in the long-run aggregate supply curve (LRA
S). 
D) movement along the long-run aggregate supply curve (LRA

Quizplus · Accepted Answer

Economic growth is represented by a rightward shift in the long-run aggregate supply curve (LRAS). This indicates an increase in potential output in the long run due to factors such as improvements in technology, education, and infrastructure. A leftward shift in the LRAS would indicate a decrease in potential output. An inward shift of the production possibilities curve would indicate a decrease in the combination of goods and services that can be produced with limited resources. A movement along the LRAS would not indicate economic growth, as it only represents a change in the price level.

Exhibit 14A-5 Macro AD-AS Model Economic Growth Is Represented in Exhibit