Suppose the Fed doubles the growth rate of the quantity of money in the economy. In the long run, the increase in money growth will change which of the following? Check all that apply. The quantity of physical capital The size of the labor force The level of technological knowledge The inflation rate Suppose the economy produces real GDP of $60 billion when unemployment is at its natural rate. Use the purple points (diamond symbol) to plot the economy's long-run aggregate supply (LRAS) curve on the graph. Suppose the government passes a law that significantly increases the minimum wage. The policy will cause the natural rate of unemployment to (Rise/fall), which will: Not affect the long-run aggregate supply curve Shift the long-run aggregate supply curve to the right Shift the long-run aggregate supply curve to the left In the following table, determine how each event affects the position of the long-run aggregate supply (LRAS) curve. Direction of LRAS Curve Shift The government allows more immigration of working-age adults who find work. (Left/no shift/ Right) A scientific breakthrough significantly increases food production per acre of farmland. (Left/no shift/ Right) A government-sponsored training program increases the skill level of the workforce. (Left/no shift/ Right)
Suppose the Fed doubles the growth rate of the quantity of money in the economy. In the long run, the increase in money growth will change which of the following? Check all that apply.
The quantity of physical capital
The size of the labor force
The level of technological knowledge
The inflation rate
Suppose the economy produces real
Use the purple points (diamond symbol) to plot the economy's long-run
Suppose the government passes a law that significantly increases the minimum wage. The policy will cause the natural rate of unemployment to (Rise/fall), which will:
Not affect the long-run
Shift the long-run aggregate supply curve to the right
Shift the long-run aggregate supply curve to the left
In the following table, determine how each event affects the position of the long-run aggregate supply (LRAS) curve.
|
Direction of LRAS Curve Shift |
|
|
The government allows more immigration of working-age adults who find work. |
(Left/no shift/ Right) |
|
A scientific breakthrough significantly increases food production per acre of farmland. |
(Left/no shift/ Right) |
|
A government-sponsored training program increases the skill level of the workforce. |
(Left/no shift/ Right) |
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