E-adjust in the long run. Price Level PL1 Economy #1 LRAS SRAS AD1 Price Level PL2 BW how each economy below will Economy # 2 LRAS Y1 YF RGDP YF Y2 Assume instead that Economy #2 experiences economic growth. What pens to LRAS and output? SRAS AD2 RGDP Does the natural rate of unemployment increase, decrease, or stay the same when the AS shifts right?

Macroeconomics: Principles and Policy (MindTap Course List)
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Author:William J. Baumol, Alan S. Blinder
Publisher:William J. Baumol, Alan S. Blinder
Chapter5: An Introduction To Macroeconomics
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3,4,and 5.Ap Macro Topic 3.7-Long Run Self Adjustment
3. Assuming wages and resource prices are flexible, show how each economy below will
self-adjust in the long run.
Economy #1
Price
Level
PL1
LRAS
SRAS
AD1
Price
Level
PL2
Economy #2
LRAS
Y1 YF
RGDP
YF Y2
4. Assume instead that Economy #2 experiences economic growth. What
happens to LRAS and output?
SRAS
AD2
RGDP
5. Does the natural rate of unemployment increase, decrease, or stay the same when the
LRAS shifts right?
Transcribed Image Text:3. Assuming wages and resource prices are flexible, show how each economy below will self-adjust in the long run. Economy #1 Price Level PL1 LRAS SRAS AD1 Price Level PL2 Economy #2 LRAS Y1 YF RGDP YF Y2 4. Assume instead that Economy #2 experiences economic growth. What happens to LRAS and output? SRAS AD2 RGDP 5. Does the natural rate of unemployment increase, decrease, or stay the same when the LRAS shifts right?
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