Question: The aggregate supply curve takes on a different shape in the long run. a. Draw a long-run aggregate supply curve and label it LRAS 1

The aggregate supply curve takes on a different shape in the long run.

a. Draw a long-run aggregate supply curve and label it LRAS1.

b. What is the name for the level of output at which the long-run aggregate supply curve meets the horizontal axis?

c. Explain why increases in the price level do not affect aggregate supply in the long run.

d. On the same graph, show what happens to the long-run aggregate supply curve when productivity increases. Label the new curve LRAS2.

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