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 level of technological knowledge The inflation rate The price level The quantity of physical capital Suppose when unemployment is at its natural rate the economy produces a level of real GDP equal to $70 billion. Using the purple points (diamond symbol) plot the economy's long-run aggregate supply (LRAS) curve on the graph. PRICE LEVEL 132 128 124 120 116 112+ 108 104 100 0 10 20 30 40 50 60 70 80 90 100 OUTPUT (Billions of dollars) LRAS ? Suppose now the government passes a law that reduces unemployment benefits in a way that causes unemployed workers to seek out new jobs more quickly. This change in policy will cause the natural rate of unemployment to O Shift the long-run aggregate supply curve to the right which will: ' O Shift the long-run aggregate supply curve to the left 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. 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. Direction of LRAS Curve Shift
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 level of technological knowledge The inflation rate The price level The quantity of physical capital Suppose when unemployment is at its natural rate the economy produces a level of real GDP equal to $70 billion. Using the purple points (diamond symbol) plot the economy's long-run aggregate supply (LRAS) curve on the graph. PRICE LEVEL 132 128 124 120 116 112+ 108 104 100 0 10 20 30 40 50 60 70 80 90 100 OUTPUT (Billions of dollars) LRAS ? Suppose now the government passes a law that reduces unemployment benefits in a way that causes unemployed workers to seek out new jobs more quickly. This change in policy will cause the natural rate of unemployment to O Shift the long-run aggregate supply curve to the right which will: ' O Shift the long-run aggregate supply curve to the left 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. 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. Direction of LRAS Curve Shift
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text: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 level of technological knowledge
The inflation rate
The price level
The quantity of physical capital
Suppose when unemployment is at its natural rate the economy produces a level of real GDP equal to $70 billion.
Using the purple points (diamond symbol) plot the economy's long-run aggregate supply (LRAS) curve on the graph.
PRICE LEVEL
132
128
124
120
116
112+
108
104
100
0
10
20
30
40
50
60 70
80
90
100
OUTPUT (Billions of dollars)
LRAS
?
Transcribed Image Text:Suppose now the government passes a law that reduces unemployment benefits in a way that causes unemployed workers to seek out new jobs more
quickly. This change in policy will cause the natural rate of unemployment to
O Shift the long-run aggregate supply curve to the right
which will:
'
O Shift the long-run aggregate supply curve to the left
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.
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.
Direction of LRAS Curve Shift
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