-Refer to Figure 13.1. The shift in the LAS curve from LAS₀ to LAS₁ could be caused by:

Question

Quizplus · Accepted Answer

The shift in the Long-Run Aggregate Supply (LAS) curve from LAS₀ to LAS₁ indicates an increase in the economy's potential output. This can be caused by factors that enhance the productive capacity of the economy, such as an increase in the stock of capital, an increase in the supply of labor, or improvements in technology. These factors directly affect the economy's ability to produce goods and services, leading to a rightward shift in the LAS curve.