Question

These questions refer to SRAS, LRAS and AD.

How does Technology work itself into LRAS? (4 Points)

If there is hurricane, how can this translate itself into the short run aggregate supply curve (draw the curve, noting both SRAS and AD and the Y and P and equilibrium)? (2Points)

Answer 1

Technology work with LRAS because , the technology is the factor of production , when factor of production changes , the LRAS changes .and technology is the big factor that cause movement in the LRAS curve. when the technology improves or upgrade, then the LRAS shifts to the rights and hence economy potential GDP increase and when technology being worse, then the LRAS curves shifts to the left and hence potential GDP decrease.

if there is a hurricane, then the short run aggregate supply curve will shift to the left because of the decrease in the supply in the market.