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Changes in LRAS

Syllabus: Compare and contrast, using the two models, the ways that factors leading to changes in the quantity and/or quality of factors of production, including improvements in:
  • efficiency,
  • new technology,
  • reductions in unemployment, and
  • institutional changes
can shift the aggregate supply curve over the long term.

The neo-classical approach

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The Keynesian approach

Insert Diagram to show shifting Keynesian LRAS