LRAS P3 Price level P2 P1 SRAS CPI AD Yp Y Real GDP (billions of dollars per year) In the above Exhibit, the self-regulatory mechanism is that in the long run: O competition from unemployed workers causes an increase in nominal wages and a leftward shift in SRAS. O competition among consumers causes an increase in the CPI and a rightward shift in SRAS. O competition among firms so that they attract workers increases nominal wages and this causes an increase in SRAS. O firms increase their nominal wages and this causes a decrease in the SRAS.
LRAS P3 Price level P2 P1 SRAS CPI AD Yp Y Real GDP (billions of dollars per year) In the above Exhibit, the self-regulatory mechanism is that in the long run: O competition from unemployed workers causes an increase in nominal wages and a leftward shift in SRAS. O competition among consumers causes an increase in the CPI and a rightward shift in SRAS. O competition among firms so that they attract workers increases nominal wages and this causes an increase in SRAS. O firms increase their nominal wages and this causes a decrease in the SRAS.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![LRAS
P3
Price level
P2
SRAS
CPI
P1
AD
Yp Y,
Real GDP
(billions of dollars per year)
In the above Exhibit, the self-regulatory mechanism is that in the long run:
O competition from unemployed workers causes an increase in nominal wages and a leftward shift in SRAS.
O competition among consumers causes an increase in the CPI and a rightward shift in SRAS.
O competition among firms so that they attract workers increases nominal wages and this causes an increase
in SRAS.
O firms increase their nominal wages and this causes a decrease in the SRAS.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fefaf3ba9-1c52-4d0d-88d9-3b3997c36cf9%2F9635f580-3c00-4a50-82d7-fe522eecd386%2Fyk8zbbm9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:LRAS
P3
Price level
P2
SRAS
CPI
P1
AD
Yp Y,
Real GDP
(billions of dollars per year)
In the above Exhibit, the self-regulatory mechanism is that in the long run:
O competition from unemployed workers causes an increase in nominal wages and a leftward shift in SRAS.
O competition among consumers causes an increase in the CPI and a rightward shift in SRAS.
O competition among firms so that they attract workers increases nominal wages and this causes an increase
in SRAS.
O firms increase their nominal wages and this causes a decrease in the SRAS.
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