AP®︎ Macroeconomics: Topic 3.4 Flashcards

Master key terms and definitions for Topic 3.4 of AP Macroeconomics – Long-Run Aggregate Supply (LRAS) to help you prep for quizzes and the AP exam.

0%
11 cards total
11 not started
0 learning
0 almost done
0 mastered
Term

Short Run vs. Long Run

Definition

Short run has some fixed input prices; long run has fully flexible wages and prices.

1 / 11
Short Run vs. Long Run
Not Started

Short run has some fixed input prices; long run has fully flexible wages and prices.

MOD-2.EMOD-2.E.1
Natural Rate of Unemployment
Not Started

The unemployment rate that exists when the economy is producing at full employment.

MOD-2.FMOD-2.F.1
Production Possibilities Curve (PPC) and LRAS
Not Started

Both show an economy's maximum productive capacity, so outward PPC shifts match rightward LRAS shifts.

MOD-2.FMOD-2.F.1
LRAS Shifters
Not Started

Changes in resource quantity, resource quality, or policy that alter potential output.

MOD-2.F
Resource Quantity and LRAS
Not Started

More labor, capital, or natural resources increase potential output; less shifts capacity downward.

MOD-2.F
Resource Quality and LRAS
Not Started

Better education, skills, technology, or infrastructure raise productivity and increase potential output.

MOD-2.F
Policy and LRAS
Not Started

Government incentives affecting work, investment, or productivity can increase or decrease potential output.

MOD-2.F
No Long-Run Inflation-Unemployment Trade-Off
Not Started

With fully flexible wages and prices, inflation cannot permanently lower unemployment below its natural rate.

MOD-2.EMOD-2.E.1
Long-Run Aggregate Supply (LRAS)
Not Started

The economy's maximum sustainable real output when all resources are fully employed.

MOD-2.FMOD-2.F.1
Long-Run Aggregate Supply Curve
Not Started

A vertical curve at full-employment real GDP because wages and prices fully adjust.

MOD-2.FMOD-2.F.2
LRAS Shifts
Not Started

Changes in productive capacity shift the curve right with growth or left with decline.

MOD-2.F