Aggregate demand/aggregate supply

Long run aggregate supply = the relationship between the total of good and services supplied (real output) and price level, when employment is full.

Causes shifts:

Technological change - the creation of new technology that can speed up the production process

Size of the labour force - a greater labour force will produce a hugher output, influenced by migration and natural rate.

Human capital - the level of output depends on the skill of the workforce, and the level of knowledge and expertise. Has an effect on productivity.

Capital stock - when there is a rise in the level of capital equipment, e,g. sewing machines, in relation to a rise in employment, then supply will increase

Raw materials - The discovery of new materials can help to raise…