← A Level Economics Revision · All LRAS shift right (long-run growth) questions · Home
A-Level Economics · LRAS shift right (long-run growth) diagram question
Which of these shifts LRAS right from LRAS₁ to LRAS₂?
The diagram
The answer
Government spending on education and retraining, raising the quantity and quality of the labour force. Every supply-side chain ends the same way: the quantity and quality of the factors of production rise, so LRAS shifts right. LRAS is the economy's maximum productive potential. It moves only when the QUANTITY AND QUALITY OF THE FACTORS OF PRODUCTION change — labour, capital, technology. Education, infrastructure, investment, deregulation, lower union power: different policies, same one shift. Confidence and the exchange rate move AD; input costs move SRAS.
Test yourself properly
This is one of 5 questions on the lras shift right (long-run growth) diagram — every corner lettered, every wrong answer diagnosed.
▶ Play the lras shift right (long-run growth) game All questions & answers