Factors that shift the AD-
Factors that shift the AS
-Price of inputs.
Factors that shift the long run aggregate supply
-Increased Labour Market Participation
-Capital Investment – including capital spending by domestic businesses
LRAS is vertical because resources are limited.Therefore,the supply is fixed in the long run and is independent of price.
The point at which the AD=AS=LRAS is the natural rate of unemployment.Natural unemployment rate is also referred to as the full employment rate and lies between 4.5-5.5%.
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