The long-run aggregate supply (LRAS) curve shifts to the right is when successful expansionary fiscal policy to bring the economy to the full-employment output level.
Aggregate supply, or AS, refers to the total quantity of output—in other words, real GDP—firms will produce and sell. The aggregate supply curve shows the total quantity of output—real GDP—that firms will produce and sell at each price level. Aggregate supply, also known as total output, is the total supply of goods and services produced within an economy at a given overall price in a given period. In order to address this issue, it has become customary to distinguish between two types of aggregate supply curves, the short‐run aggregate supply curve and the long‐run aggregate supply curve. Aggregate supply is a response to increasing prices that drive firms to utilize more inputs to produce more output. The incentive is that if the price of inputs remains the same and the price of outputs increases, the firm will generate larger profits and margins by producing and selling more.
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