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. O The quantity of physical capital O The price level The size of the labor force 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. 132 128 LRAS 124 120 116 112 108 104 100 10 20 30 50 60 70 80 OUTPUT (Billions of dollars) PRICE LEVEL 40 Suppose the government passes a law that significantly increases the minimum wage. The policy will cause the natural rate of unemployment to which will: Not affect the long-run aggregate supply curve Shift the long-run aggregate supply curve to the left Shift the long-run aggregate supply curve to the right 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. A scientific breakthrough significantly increases food production per acre of farmland. A government-sponsored training program increases the skill level of the workforce.
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. O The quantity of physical capital O The price level The size of the labor force 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. 132 128 LRAS 124 120 116 112 108 104 100 10 20 30 50 60 70 80 OUTPUT (Billions of dollars) PRICE LEVEL 40 Suppose the government passes a law that significantly increases the minimum wage. The policy will cause the natural rate of unemployment to which will: Not affect the long-run aggregate supply curve Shift the long-run aggregate supply curve to the left Shift the long-run aggregate supply curve to the right 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. A scientific breakthrough significantly increases food production per acre of farmland. A government-sponsored training program increases the skill level of the workforce.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text: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.
O The quantity of physical capital
O The price level
The size of the labor force
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.
132
128
LRAS
124
120
116
112
108
104
100
10
20
30
50
60
70
80
OUTPUT (Billions of dollars)
PRICE LEVEL
40
Transcribed Image Text:Suppose the government passes a law that significantly increases the minimum wage. The policy will cause the natural rate of unemployment to
which will:
Not affect the long-run aggregate supply curve
Shift the long-run aggregate supply curve to the left
Shift the long-run aggregate supply curve to the right
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.
A scientific breakthrough significantly increases food production per acre of farmland.
A government-sponsored training program increases the skill level of the workforce.
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