Questions: Both classical and Keynesian economists agree about which of the following? The LRAS curve has three segments: horizontal, transition, and vertical segments. When all the facthys of production are fully utilized, the LRAS curve is vertical. When all the factors of production are fully utilized, the LRAS curve is horizontal. It is impossible for changes in the factors of production to shift the LRAS curve.

The answer is the second one: When all the factors of production are fully utilized, the LRAS curve is vertical.

Explanation for each option:

1. The LRAS curve has three segments: horizontal, transition, and vertical segments.

   • This statement is incorrect. The Long-Run Aggregate Supply (LRAS) curve is typically represented as a vertical line in economic models, indicating that in the long run, the total output of an economy is determined by the factors of production and technology, not by the price level. The concept of three segments is more applicable to the Short-Run Aggregate Supply (SRAS) curve in some models, not the LRAS.

2. When all the factors of production are fully utilized, the LRAS curve is vertical.

   • This statement is correct. Both classical and Keynesian economists agree that the LRAS curve is vertical when all factors of production are fully utilized. This reflects the idea that in the long run, an economy's output is at its potential level, determined by resources and technology, and is not affected by changes in the price level.

3. When all the factors of production are fully utilized, the LRAS curve is horizontal.

   • This statement is incorrect. A horizontal LRAS curve would imply that the economy can produce more output without any increase in the price level, which contradicts the concept of full utilization of resources. The LRAS curve is vertical, not horizontal, when all resources are fully utilized.

4. It is impossible for changes in the factors of production to shift the LRAS curve.

   • This statement is incorrect. Changes in the factors of production, such as improvements in technology, increases in labor force, or capital accumulation, can indeed shift the LRAS curve. These changes can increase the potential output of an economy, shifting the LRAS curve to the right.

In summary, the correct statement that both classical and Keynesian economists agree on is that the LRAS curve is vertical when all factors of production are fully utilized.