Question: Again, let labor be the variable shown on the horizontal axis and Real GDP on the vertical axis. Suppose there is an increase in physical

Again, let labor be the variable shown on the horizontal axis and Real GDP on the vertical axis. Suppose there is an increase in physical capital. Does the increase lead to a movement along the production function or to a shift in the production function? Explain your answer. Next, draw the change in the LRAS curve that results from an increase in physical capital.

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