Q11210810410001020304050607080OUTPUT (Billions of dollars)Suppose the government passes a law that reduces unemployment benefits in a way that causes unemployed workers to seek out new jobs morequickly. The policy will cause the natural rate of unemployment towhich will:O Shift the long-run aggregate supply curve to the leftO Shift the long-run aggregate supply curve to the rightO Not affect the long-run aggregate supply curveIn the following table, determine how each event affects the position of the long-run aggregate supply (LRAS) curve.Direction of LRAS Curve ShiftMany workers leave to pursue more lucrative careers in foreign economies.A scientific breakthrough significantly increases food production per acre of farmland.A natural disaster destroys a significant amount of the economy's production facilities. 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 ofthe following? Check all that apply.O The size of the labor forceO The level of technological knowledgeThe price levelThe inflation rateSuppose the economy produces real GDP of $40 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.132128LRAS124120116Q112 +PRICE LEVEL

In the long run output is produced at the natural rate of output.

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 size of the labor force The level of technological knowledge O The price level The inflation rate Suppose the economy produces real GDP of $40 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 Q112 + PRICE LEVEL

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 size of the labor force The level of technological knowledge O The price level The inflation rate Suppose the economy produces real GDP of $40 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 Q112 + PRICE LEVEL

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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