Suppose the economy produces real gdp of $70 billion when unemployment is at its natural rate.
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If you're seeing this message, it means we're having trouble loading external resources on our website. Show If you're behind a web filter, please make sure that the domains *.kastatic.org and *.kasandbox.org are unblocked. In: Economics 5. The slope and position of the long-run aggregate supply curve 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 inflation rate The quantity of physical capital The size of the labor force The price level 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 rate of unemployment to rise/fall, which will: Shift the long-run aggregate supply curve to the left fall Shift the long-run aggregate supply curve to the right Not affect the long-run aggregate supply curve 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. For environmental and safety reasons, the government requires that the country's nuclear power plants be permanently shut down. A natural disaster destroys a significant amount of the economy's production facilities. Q1) options 1, 4 In long run, changes in money supply only affects nominal variables, no effect on real Variables So prices & inflation rate is affected . Graph LRAS is Vertical at Y = 60 . 1) rise in Minimum wages will cause Unemployment rate to rise MCQ: option 1) LRAS shifts to left Table
This preview shows page 8 - 11 out of 17 pages. Suppose the economy produces real GDP of $70 billion when unemployment is at its natural rate.Use the purple points (diamond symbol) to plot the economy's long-run aggregate supply (LRAS) curveon the graph. Get answer to your question and much more Suppose the government passes a law that reduces unemployment benefits in a way that causesunemployed workers to seek out new jobs more quickly. The policy will cause the natural rate ofunemployment tofall, which will:Points:1 / 1Close Explanation Get answer to your question and much more In the following table, determine how each event affects the position of the long-run aggregate supply(LRAS) curve. Direction of LRASCurve ShiftThe government allows more immigration of working-age adultswho find work.RightA scientific breakthrough significantly increases food productionper acre of farmland.RightA government-sponsored training program increases the skill levelof the workforce.RightPoints:1 / 1Close Explanation Get answer to your question and much more Upload your study docs or become a Course Hero member to access this document Upload your study docs or become a Course Hero member to access this document End of preview. Want to read all 17 pages? Upload your study docs or become a Course Hero member to access this document What happens to the unemployment rate when real GDP falls?The unemployment rate tends to rise during periods of falling real GDP as firms cut back on production and lay off workers. The unemployment rate tends to fall during economic expansions as firms expand production and hire additional workers.
What are the factors that affect real GDP?The price level The size of the labor force The inflation rate The quantity of physical capital Suppose the economy produces real GDP of $60 billion when unemployment is at its natural rate.
Are the shortTrue or False: Short-term fluctuations in real GDP are irregular and unpredictable. A recession is a period of declining real GDP. The technical definition of recession is "a period of falling real GDP that lasts 6 months or more." The short-term fluctuations in real GDP are irregular and unpredictable.
What is the effect of the recession on real GDP?Check all that apply. Total real income declined. Car sales increased. The unemployment rate increased. Consumer spending increased. Total real income declined. The unemployment rate increased. Most macroeconomic quantities fluctuate together. Recall that real GDP measures the economy's total output and total income simultaneously.
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