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3. Assuming wages and resource prices are flexible, show how each economy below will self-adjust in the long run. Economy #1 Price LRAS Level SRAS XV PL2 AD1 Level PL1 Economy #2 Price Y1 LRAS YF RGDP YF Y2 4. Assume instead that Economy #2 experiences economic growth. What happens to LRAS and output? SRAS AD2 RGDP 5. Does the natural rate of unemployment increase, decrease, or stay the same when the LRAS shifts right?

3. Assuming wages and resource prices are flexible, show how each economy below will self-adjust in the long run. Economy #1 Price LRAS Level SRAS XV PL2 AD1 Level PL1 Economy #2 Price Y1 LRAS YF RGDP YF Y2 4. Assume instead that Economy #2 experiences economic growth. What happens to LRAS and output? SRAS AD2 RGDP 5. Does the natural rate of unemployment increase, decrease, or stay the same when the LRAS shifts right?

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter21: Unemployment
Section: Chapter Questions
Problem 4SCQ: Whose unemployment rates are commonly higher in the U.S. economy: Whites or nonwhites? The young or...
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3. Assuming wages and resource prices are flexible, show how each economy below will self-adjust in the long run. Economy #1 Price Level PL1 LRAS SRAS AD1 Price Level PL2 Economy #2 LRAS Y1 YF RGDP YF Y2 4. Assume instead that Economy #2 experiences economic growth. What happens to LRAS and output? SRAS AD2 RGDP 5. Does the natural rate of unemployment increase, decrease, or stay the same when the LRAS shifts right?
Transcribed Image Text:3. Assuming wages and resource prices are flexible, show how each economy below will self-adjust in the long run. Economy #1 Price Level PL1 LRAS SRAS AD1 Price Level PL2 Economy #2 LRAS Y1 YF RGDP YF Y2 4. Assume instead that Economy #2 experiences economic growth. What happens to LRAS and output? SRAS AD2 RGDP 5. Does the natural rate of unemployment increase, decrease, or stay the same when the LRAS shifts right?
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