Which of the following factors will influence the position of the long-run aggregate supply curve? Check all that apply. V The inflation rate V The size of the labour force O The quantity of physical capital V The price level Suppose the economy produces real GDP of $50 billion when unemployment is at its natural rate. On the following graph, use the purple line (diamond symbol) to plot the economy's long-run aggregate supply (LRAS) curve. (?) 132 128 LRAS 124 120 116 112 108 104 100 10 20 30 40 50 60 70 80 REAL GDP (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 more quickly. The policy will cause the natural rate of unemployment to fall v , which will: O Shift the long-run aggregate supply curve to the left O Not affect the long-run aggregate supply curve O 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 Event Left Right No Shift Many workers leave to pursue more lucrative careers in foreign economies. For environmental and safety reasons, the government requires that the country's nuclear power plants be permanently shut down. An investment tax credit increases the rate at which firms acquire machinery and equipment. PRICE LEVE
Which of the following factors will influence the position of the long-run aggregate supply curve? Check all that apply. V The inflation rate V The size of the labour force O The quantity of physical capital V The price level Suppose the economy produces real GDP of $50 billion when unemployment is at its natural rate. On the following graph, use the purple line (diamond symbol) to plot the economy's long-run aggregate supply (LRAS) curve. (?) 132 128 LRAS 124 120 116 112 108 104 100 10 20 30 40 50 60 70 80 REAL GDP (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 more quickly. The policy will cause the natural rate of unemployment to fall v , which will: O Shift the long-run aggregate supply curve to the left O Not affect the long-run aggregate supply curve O 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 Event Left Right No Shift Many workers leave to pursue more lucrative careers in foreign economies. For environmental and safety reasons, the government requires that the country's nuclear power plants be permanently shut down. An investment tax credit increases the rate at which firms acquire machinery and equipment. PRICE LEVE
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Which of the following factors will influence the position of the long-run aggregate supply curve? Check all that apply.
V The inflation rate
V The size of the labour force
O The quantity of physical capital
V The price level
Suppose the economy produces real GDP of $50 billion when unemployment is at its natural rate. On the following graph, use the purple line (diamond
symbol) to plot the economy's long-run aggregate supply (LRAS) curve.
(?)
132
128
LRAS
124
120
116
112
108
104
100
10
20
30
40
50
60
70
80
REAL GDP (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 more
quickly. The policy will cause the natural rate of unemployment to fall v , which will:
O Shift the long-run aggregate supply curve to the left
O Not affect the long-run aggregate supply curve
O 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
Event
Left
Right
No Shift
Many workers leave to pursue more lucrative careers in foreign economies.
For environmental and safety reasons, the government requires that the country's nuclear power plants be
permanently shut down.
An investment tax credit increases the rate at which firms acquire machinery and equipment.
PRICE LEVE
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