ECON 214 D05 201320 Lisa A. Wilson Liberty University P ROBLEM S ET 2 Complete all questions listed below. Clearly label your answers 1. What impact would a change that shifts an economy's production possibilities curve outward have on the LRAS curve? How have improvements in computer technology affected production possibilities and the long run aggregate supply curve? Explain . The production possibilities curve signifies the maximum yield that can be produced due to limited resources. The economy would have the potential to grow if an economy’s production possibilities curve shifts outward due to the availability of more resources or advances in computer technology. The LRAS curve shifts outward if more resources become available or if there are advances in computer technology. Capital stock then increases. 2. Construct the AD, SRAS, and LRAS curves for an economy experiencing: (a) full employment, (b) an economic boom, and (c) a recession. (Graphs can be hand drawn or done by computer; label all curves and a