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Long Run Aggregate Supply
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Long Run Aggregate Supply
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17. Aggregate Demand and Aggregate Supply Analysis / Long Run Aggregate Supply / Problem 4
Problem 4
Analyze the potential economic outcome if a country loses access to a major natural resource due to geopolitical tensions.
A
The LRAS curve remains unchanged, as natural resources do not affect potential output.
B
The LRAS curve shifts to the right, indicating an increase in potential output.
C
The LRAS curve shifts to the left, indicating a decrease in potential output.
D
The LRAS curve becomes horizontal, indicating no change in potential output.
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