Explain how each of the following will affect long-run aggregate supply (potential real gross domestic product).

1. A decrease in the labor force participation rate
2. 
   
3. An increase in the government deficit following a reduction in personal taxes
4. 
   
5. A decrease in the quantity of inputs required to produce a unit of output
6. 
   
7. An increase in the quantity and quality of education
8. 
   
9. An increase in the rate of savings

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Answer rating: 100% (QA)

Longrun aggregate supply LRAS refers to the potential output or real gross domestic product GDP that an economy can produce when all resources are fully utilized Changes in various factors can impact ... View the full answer