Hi guys, kinda confused here! Was reading up on supply side policies and i am confused as to how privatisation can lead to an increase in LRAS and an expansion in the PPF curve. In order for LRAS to increase there has to be an improvement in the quality or quantity of the factors of production.
Since privatisation improves the efficiency of firms, surely that would mean that are ON the curve of the PPF (as it assumes all FOP are fully employed and efficienty used).
Please can someone explain to me how privatisation increase LRAS thank you!
Supply Side Policies Economics watch
- Thread Starter
- 13-02-2016 16:32
- Official Rep
- 15-02-2016 17:50
Sorry you've not had any responses about this.
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