AP Macroeconomics Flashcards: Long Run Aggregate Supply Lras

What this deck covers

This deck focuses on Long Run Aggregate Supply Lras, giving you a quick way to review the definitions, rules, and examples that matter most for AP Macroeconomics.

How to use these flashcards

Work through these flashcards in short sessions. Try to answer each prompt before flipping the card, then revisit any cards you miss until the explanation feels automatic.

Flashcard 1: How does a significant increase in foreign investment affect LRAS?

Answer: Shifts LRAS to the right. Capital inflows increase investment and productive capacity.

Flashcard 2: What is the role of natural resources in determining LRAS?

Answer: More resources shift LRAS right. Greater availability of inputs increases productive potential.

Flashcard 3: How does a decrease in labor participation affect LRAS?

Answer: Shifts LRAS to the left. Fewer available workers reduces total productive capacity.

Flashcard 4: Identify the shape of the LRAS curve.

Answer: Vertical line. Output is fixed regardless of price level changes.

Flashcard 5: Which factors can shift the LRAS curve?

Answer: Technology, labor, capital, resources. These determine the economy's productive capacity and efficiency.

Flashcard 6: What does the Long-Run Aggregate Supply (LRAS) curve represent?

Answer: Potential output of an economy at full employment. Shows maximum sustainable output when all resources are fully utilized.

Flashcard 7: What is the long-run effect of increased immigration on LRAS?

Answer: Shifts LRAS to the right. More workers expand the total labor force available.

Flashcard 8: Identify the effect of a long-term decline in birth rate on LRAS.

Answer: Shifts LRAS to the left. Fewer future workers reduces long-term labor supply.

Flashcard 9: What is the effect of increased entrepreneurship on LRAS?

Answer: Shifts LRAS to the right. More business creation increases innovation and efficiency.

Flashcard 10: How does an increase in capital goods impact LRAS?

Answer: Shifts LRAS to the right. More tools and machinery increase productive capacity.

Flashcard 11: What is the effect of increased productivity on LRAS?

Answer: Shifts LRAS to the right. Higher output per worker increases total potential production.

Flashcard 12: How does a decrease in government spending on infrastructure impact LRAS?

Answer: Shifts LRAS to the left. Poor infrastructure reduces economy-wide productivity.

Flashcard 13: How does a long-run decrease in investments impact LRAS?

Answer: Shifts LRAS to the left. Less capital formation reduces future productive capacity.

Flashcard 14: What impact does an increase in labor productivity have on LRAS?

Answer: Shifts LRAS to the right. Higher output per worker increases total potential production.

Flashcard 15: State one impact of an increase in the labor force on LRAS.

Answer: Shifts LRAS curve to the right. More workers available increases total productive capacity.

Flashcard 16: What economic concept is represented by the vertical LRAS?

Answer: Full employment output. The level where unemployment equals the natural rate.

Flashcard 17: How does an increase in capital goods impact LRAS?

Answer: Shifts LRAS to the right. More tools and machinery increase productive capacity.

Flashcard 18: Identify the shape of the LRAS curve.

Answer: Vertical line. Output is fixed regardless of price level changes.

Flashcard 19: How does a decrease in labor participation affect LRAS?

Answer: Shifts LRAS to the left. Fewer available workers reduces total productive capacity.

Flashcard 20: What impact does a higher retirement age have on LRAS?

Answer: Shifts LRAS to the right. Workers remain productive longer, expanding labor supply.

Flashcard 21: What does a leftward shift in the LRAS curve indicate?

Answer: Decrease in potential output. Economy's productive capacity has declined permanently.

Flashcard 22: What economic concept is represented by the vertical LRAS?

Answer: Full employment output. The level where unemployment equals the natural rate.

Flashcard 23: Identify the impact of a labor strike on LRAS.

Answer: No immediate effect on LRAS. Temporary disruption doesn't change long-run productive capacity.

Flashcard 24: What happens to LRAS when there is a decrease in resources?

Answer: Shifts LRAS to the left. Fewer inputs reduce the economy's total productive capacity.

Flashcard 25: How does better healthcare affect LRAS?

Answer: Shifts LRAS to the right. Healthier workforce is more productive and works longer.

Flashcard 26: Identify the effect of an increase in educational attainment on LRAS.

Answer: Shifts LRAS to the right. More skilled workers increase overall productivity.

Flashcard 27: What is the long-run effect of an increase in investment on LRAS?

Answer: Shifts LRAS to the right. Creates capital that permanently increases productive capacity.

Flashcard 28: What is the effect of a natural disaster on LRAS?

Answer: Shifts LRAS to the left. Destroys productive capacity and reduces available resources.

Flashcard 29: How does better healthcare affect LRAS?

Answer: Shifts LRAS to the right. Healthier workforce is more productive and works longer.

Flashcard 30: How does an increase in capital stock affect the LRAS?

Answer: Shifts LRAS to the right. Additional machinery and equipment boost productive capacity.

Flashcard 31: What is the long-run effect of an increase in investment on LRAS?

Answer: Shifts LRAS to the right. Creates capital that permanently increases productive capacity.

Flashcard 32: How does a long-term increase in tariffs affect LRAS?

Answer: Potentially shifts LRAS to the left. Trade barriers reduce efficiency and resource allocation.

Flashcard 33: How does technological advancement affect the LRAS curve?

Answer: Shifts it to the right. Improves productivity and increases potential output permanently.

Flashcard 34: What is the effect of an aging population on LRAS?

Answer: Potentially shifts LRAS to the left. Older workers may be less productive and retire sooner.

Flashcard 35: What is the effect of improved research and development on LRAS?

Answer: Shifts LRAS to the right. Innovation creates new technologies that boost productivity.

Flashcard 36: What happens to LRAS if there is an improvement in infrastructure?

Answer: Shifts LRAS to the right. Better infrastructure enhances productivity across the economy.

Flashcard 37: What is the effect of increased entrepreneurship on LRAS?

Answer: Shifts LRAS to the right. More business creation increases innovation and efficiency.

Flashcard 38: State one impact of an increase in the labor force on LRAS.

Answer: Shifts LRAS curve to the right. More workers available increases total productive capacity.

Flashcard 39: How does a long-term increase in tariffs affect LRAS?

Answer: Potentially shifts LRAS to the left. Trade barriers reduce efficiency and resource allocation.

Flashcard 40: Identify the long-run effect of a significant technological breakthrough on LRAS.

Answer: Shifts LRAS to the right. Major innovations permanently increase productive potential.

Flashcard 41: What impact does a reduction in regulation have on LRAS?

Answer: Shifts LRAS to the right. Fewer restrictions allow more efficient resource allocation.

Flashcard 42: What is the relationship between LRAS and price level?

Answer: LRAS is not affected by the price level. Output remains constant at potential GDP regardless of prices.

Flashcard 43: What is the effect of improved education on LRAS?

Answer: Shifts LRAS to the right. Better skills increase worker productivity and potential output.

Flashcard 44: What is the effect of an aging population on LRAS?

Answer: Potentially shifts LRAS to the left. Older workers may be less productive and retire sooner.

Flashcard 45: What is the effect of increased productivity on LRAS?

Answer: Shifts LRAS to the right. Higher output per worker increases total potential production.

Flashcard 46: Identify one factor that does not shift the LRAS curve.

Answer: Price level. Price changes don't affect the economy's productive capacity.

Flashcard 47: How does a decrease in government spending on infrastructure impact LRAS?

Answer: Shifts LRAS to the left. Poor infrastructure reduces economy-wide productivity.

Flashcard 48: What does a rightward shift in the LRAS curve indicate?

Answer: Increase in potential output. Economy can produce more goods and services at full employment.

Flashcard 49: Identify the impact of a long-term decline in birth rates on LRAS.

Answer: Shifts LRAS to the left. Fewer future workers reduces long-term productive capacity.

Flashcard 50: Identify the impact of a long-term decrease in savings on LRAS.

Answer: Potentially shifts LRAS to the left. Less investment reduces future capital and productive capacity.

Flashcard 51: What is the effect of a decrease in available land on LRAS?

Answer: Shifts LRAS to the left. Less available space constrains productive activities.