5. The slope and position of the long-run aggregate supply curveSuppose the Fed doubles the growth rate of the quantity of money in the economy. In the long run, the increase in money growth will changewhich of the following? Check all that apply.O The inflation rateO The quantity of physical capitalO The size of the labor forceO The price levelSuppose the economy produces real GDP of $30 billion when unemployment is at its natural rate.Use the purple points (diamond symbol) to piot the economy's long-run aggregate supply (LRAS) curve on the graph.132128LRAS1241201161121081041001020304050607080OUTPUT (Billions of dollars)Suppose the government passes a law that reduces unemployment benefits in a way that causes unemployed workers to seek out new jobsmore quickly. The policy will cause the natural rate of unemployment to fall, which will:Shift the long-run aggregate supply curve to the leftShift the long-run aggregate supply curve to the rightNot affect the long-run aggregate supply curveIn the following table, determine how each event affects the position of the long-run aggregate supply (LRAS) curve.Direction of LRAS Curve ShiftThe government allows more immigration of working-age adults who find work.LeftThis economy's primary source of foreign oil decides to cease exports for politicalLeftreasons.An investment tax credit increases the rate at which firms acquire machinery andRightequipment.PRICE LEVEL

The slope and position of the long run aggregate supply curve .

5. The slope and position of the long-run aggre Suppose the Fed doubles the growth rate of the which of the following? Check all that apply. The inflation rate The quantity of physical capital The size of the labor force

5. The slope and position of the long-run aggre Suppose the Fed doubles the growth rate of the which of the following? Check all that apply. The inflation rate The quantity of physical capital The size of the labor force

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

5. The slope and position of the long-run aggregate supply curve
Suppose the Fed doubles the growth rate of the quantity of money in the economy. In the long run, the increase in money growth will change
which of the following? Check all that apply.
O The inflation rate
O The quantity of physical capital
O The size of the labor force
O The price level
Suppose the economy produces real GDP of $30 billion when unemployment is at its natural rate.
Use the purple points (diamond symbol) to piot the economy's long-run aggregate supply (LRAS) curve on the graph.
132
128
LRAS
124
120
116
112
108
104
100
10
20
30
40
50
60
70
80
OUTPUT (Billions of dollars)
Suppose the government passes a law that reduces unemployment benefits in a way that causes unemployed workers to seek out new jobs
more quickly. The policy will cause the natural rate of unemployment to fall
, which will:
Shift the long-run aggregate supply curve to the left
Shift the long-run aggregate supply curve to the right
Not affect the long-run aggregate supply curve
In the following table, determine how each event affects the position of the long-run aggregate supply (LRAS) curve.
Direction of LRAS Curve Shift
The government allows more immigration of working-age adults who find work.
Left
This economy's primary source of foreign oil decides to cease exports for political
Left
reasons.
An investment tax credit increases the rate at which firms acquire machinery and
Right
equipment.
PRICE LEVEL

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