Which of the following statements are true based on the previous graphs? Check all that apply. The unemployment rate is currently 3% higher than the natural rate of unemployment. The current quantity of output is greater than potential output. The natural rate of output is $9 trillion. Suppose the central bank of the economy increases the money supply. Show the long-run effects of this policy on both of the graphs by shifting the appropriate curves. The long-run effect of the central bank's policy is in real GDP. in the inflation rate, in the unemployment rate, and
Which of the following statements are true based on the previous graphs? Check all that apply. The unemployment rate is currently 3% higher than the natural rate of unemployment. The current quantity of output is greater than potential output. The natural rate of output is $9 trillion. Suppose the central bank of the economy increases the money supply. Show the long-run effects of this policy on both of the graphs by shifting the appropriate curves. The long-run effect of the central bank's policy is in real GDP. in the inflation rate, in the unemployment rate, and
Chapter1: Making Economics Decisions
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Transcribed Image Text:Which of the following statements are true based on the previous graphs? Check all that apply.
The unemployment rate is currently 3% higher than the natural rate of unemployment.
The current quantity of output is greater than potential output.
The natural rate of output is $9 trillion.
Suppose the central bank of the economy increases the money supply.
Show the long-run effects of this policy on both of the graphs by shifting the appropriate curves.
The long-run effect of the central bank's policy is
in real GDP.
in the inflation rate,
in the unemployment rate, and
Transcribed Image Text:The following graphs show the state of an economy that is currently in long-run equilibrium. The first graph shows the aggregate-demand (AD) and
long-run aggregate-supply (LRAS) curves. The second shows the long-run and short-run Phillips curves (LRPC and SRPC).
PRICE LEVEL
INFLATION RATE
0
0
3
1
LRAS
6
12
9
OUTPUT (Trillions of dollars)
LRPC
4
UNEMPLOYMENT (Percent)
2 3
15
5
AD
SRPC
18
6
AD
LRAS
SRPC
LRPC
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