The fundamental determinants of long-run AS such as technology, productivity, attitudes, enterprise, factor mobility, and economic incentives
Long-run aggregate supply (LRAS) measures the maximum output an economy can produce at full capacity. Technology, productivity, and other supply-side factors determine where that limit sits.
Real World
South Korea's investment in robotics and automation since the 1990s has continuously shifted its LRAS rightward — labour productivity per hour is now among the highest in Asia, allowing the economy to produce far more output with the same workforce.
Exam Focus
In 'evaluate supply-side policies' questions, link each policy explicitly to a LRAS determinant (e.g. training → productivity) to demonstrate analytical depth and secure top-band marks.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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