5. The slope and position of the long-run aggregate supply curveAssume the Federal Reserve triples the growth rate of the quantity of money in circulation. In the long run, this increase in money growth will affectwhich of the following? Check all that apply.EL132Suppose when unemployment is at its natural rate the economy produces a level of real GDP equal to $50 billion.128The price levelUsing the purple points (diamond symbol) plot the economy's long-run aggregate supply (LRAS) curve on the graph.124The quantity of physical capital120The inflation rateThe size of the labor forceLRAS? OUTPUT (Billions of dollars)Suppose now the government passes a law that reduces unemployment benefits in a way that causes unemployed workers to seek out new jobs morequickly. This change in policy will cause the natural rate of unemployment towhich will:Shift the long-run aggregate supply curve to the rightNot impact the long-run aggregate supply curveShift the long-run aggregate supply curve to the leftIComplete the following table by determining how each event impacts the position of the long-run aggregate supply (LRAS) curve.An investment tax credit increases the rate at which firms acquire machinery andequipment.Many workers leave to pursue more lucrative careers in foreign economies.For environmental and safety reasons, the government requires that the country's nuclearpower plants be permanently shut down.Direction of LRAS Curve Shift11

Potential level output is the maximum output that an economy can produce using the given level of…

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. The price level The quantity of physical capital The inflation rate The size of the labor force

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. The price level The quantity of physical capital The inflation rate 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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