LRAS Shift Right (Economic Growth)

AD/AS Model · Macro
LearnWithOtti LearnWithOtti
www.learnwithotti.co.uk
SRAS₁ SRAS₂ LRAS₁ LRAS₂ AD
More productive capacity shifts LRAS₁ → LRAS₂ and SRAS₁ → SRAS₂: potential output rises Y₁ → Y₂ and the price level falls PL₁ → PL₂.