5. The slope and position of the long-run aggregate supply curve Assume the Federal Reserve triples the growth rate of the quantity of money in circulation. In the long run, this increase in money growth will affect which of the following? Check all that apply. PRICE LEVEL 132 Suppose when unemployment is at its natural rate the economy produces a level of real GDP equal to $60 billion. 128 Using the purple points (diamond symbol) plot the economy's long-run aggregate supply (LRAS) curve on the graph. (?) 124 120 116 112 108 The price level 104 The size of the labor force 100 The inflation rate The quantity of physical capital 0 10 20 30 40 50 60 70 OUTPUT (Billions of dollars) 80 90 100 LRAS Suppose now the government passes a law that significantly increases the minimum wage. This change in policy will cause the natural rate of unemployment to , which will: O Shift the long-run aggregate supply curve to the left O Shift the long-run aggregate supply curve to the right O Not impact the long-run aggregate supply curve Complete the following table by determining how each event impacts the position of the long-run aggregate supply (LRAS) curve. Direction of LRAS Curve Shift A government-sponsored training program increases the skill level of the workforce. The government allows more immigration of working-age adults who find work. A scientific breakthrough significantly increases food production per acre of farmland.
5. The slope and position of the long-run aggregate supply curve Assume the Federal Reserve triples the growth rate of the quantity of money in circulation. In the long run, this increase in money growth will affect which of the following? Check all that apply. PRICE LEVEL 132 Suppose when unemployment is at its natural rate the economy produces a level of real GDP equal to $60 billion. 128 Using the purple points (diamond symbol) plot the economy's long-run aggregate supply (LRAS) curve on the graph. (?) 124 120 116 112 108 The price level 104 The size of the labor force 100 The inflation rate The quantity of physical capital 0 10 20 30 40 50 60 70 OUTPUT (Billions of dollars) 80 90 100 LRAS Suppose now the government passes a law that significantly increases the minimum wage. This change in policy will cause the natural rate of unemployment to , which will: O Shift the long-run aggregate supply curve to the left O Shift the long-run aggregate supply curve to the right O Not impact the long-run aggregate supply curve Complete the following table by determining how each event impacts the position of the long-run aggregate supply (LRAS) curve. Direction of LRAS Curve Shift A government-sponsored training program increases the skill level of the workforce. The government allows more immigration of working-age adults who find work. A scientific breakthrough significantly increases food production per acre of farmland.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:5. The slope and position of the long-run aggregate supply curve
Assume the Federal Reserve triples the growth rate of the quantity of money in circulation. In the long run, this increase in money growth will affect
which of the following? Check all that apply.
PRICE LEVEL
132
Suppose when unemployment is at its natural rate the economy produces a level of real GDP equal to $60 billion.
128
Using the purple points (diamond symbol) plot the economy's long-run aggregate supply (LRAS) curve on the graph.
(?)
124
120
116
112
108
The price level
104
The size of the labor force
100
The inflation rate
The quantity of physical capital
0
10
20
30 40 50 60 70
OUTPUT (Billions of dollars)
80
90 100
LRAS
Suppose now the government passes a law that significantly increases the minimum wage. This change in policy will cause the natural rate of
unemployment to
, which will:
O Shift the long-run aggregate supply curve to the left
O Shift the long-run aggregate supply curve to the right
O Not impact the long-run aggregate supply curve
Complete the following table by determining how each event impacts the position of the long-run aggregate supply (LRAS) curve.
Direction of LRAS Curve Shift
A government-sponsored training program increases the skill level of the workforce.
The government allows more immigration of working-age adults who find work.
A scientific breakthrough significantly increases food production per acre of farmland.
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