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Category - Economics

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In the long run aggregate supply (LRAS), the curve is affected by the following EXCEPT:
  1. labor
  2. capital
  3. technological capability
  4. trade deficits
Explanation
Answer: D - Trade deficits do not affect the long run aggregate supply.

Key Takeaway: In a long run aggregate supply (LRAS), a period of optimal use of resources is assumed. This means that the curve becomes increasingly vertical with aggregate demand producing only temporary changes in economic output. LRAS is affected by labor, capital availability, and technological capability.
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