Does productivity increasing shift lras or sras curve

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youreanutter
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and why
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username1524603
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Courtesy of a good explanation found on economicsonline the LRAS can shift if the economy’s productivity changes, either through an increase in the quantity of scarce resources, such as inward migration or organic population growth, or improvements in the quality of resources, such as through better education and training. Shifts in LRAS are gradual and anticipated; LRAS can shift for many reasons, including:
  1. The level of spending on new technology, which enables an economy to produce in greater volume or improved quality - even using the same quantity of scarce resources.
  2. Long term inward investment from abroad, which enables increased production. Inward investment, like domestic investment, increases an economy’s productive capacity.
  3. Migration and population growth, which increases the quantity of human capital.
  4. Education and training, which increases the quality of human capital.
  5. Competition in product and labour markets, which improves efficiency and productivity.
  6. Effective supply-side policy.
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BobbyFlay
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(Original post by Nigel Farage MEP)
LRAS can shift if the economy’s productivity changes, either through an increase in the quantity of scarce resources, such as inward migration or organic population growth, or improvements in the quality of resources, such as through better education and training. Shifts in LRAS are gradual and anticipated; LRAS can shift for many reasons, including:
  1. The level of spending on new technology, which enables an economy to produce in greater volume or improved quality - even using the same quantity of scarce resources.
  2. Long term inward investment from abroad, which enables increased production. Inward investment, like domestic investment, increases an economy’s productive capacity.
  3. Migration and population growth, which increases the quantity of human capital.
  4. Education and training, which increases the quality of human capital.
  5. Competition in product and labour markets, which improves efficiency and productivity.
  6. Effective supply-side policy, which creates the right environment for households to supply factors for purchasing products or supplying labour, and firms to produce more.
Just to add to this, a change in price would cause a movement along the AS. Both LRAS & SRAS would shift from the increase in productivity. Please note that this economic model is theoretical and is dependent on quite a few assumptions, the nature/shape of the AS curve can also vary between different schools of thought.
I found a site that explains this pretty well, in case you still don't understand.
http://www.amosweb.com/cgi-bin/awb_n...e+supply+curve
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username1524603
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(Original post by BobbyFlay)
Just to add to this, a change in price would cause a movement along the AS. Both LRAS & SRAS would shift from the increase in productivity. Please note that this economic model is theoretical and is dependent on quite a few assumptions, the nature/shape of the AS curve can also vary between different schools of thought.
I found a site that explains this pretty well, in case you still don't understand.
http://www.amosweb.com/cgi-bin/awb_n...e+supply+curve
Yes, but the SRAS moves with changes in the productivity of individual units of labour, not changes in general productivity which is usually caused by capital changes, technological changes, improvements to production efficiency, and centralisation of production.
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