In the following table, determine how each event affects the position of the long-run aggregate supply (LRAS) curve. Direction of LRAS Curve Shift Many 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. 11
In the following table, determine how each event affects the position of the long-run aggregate supply (LRAS) curve. Direction of LRAS Curve Shift Many 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. 11
Chapter20: Aggregate Demand And Supply
Section20.A: The Self Correcting Aggregate Demand And Supply Model
Problem 11SQ
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Transcribed Image Text:In the following table, determine how each event affects the position of the long-run aggregate supply (LRAS) curve.
Direction of LRAS Curve Shift
Many 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.
Transcribed Image Text: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 quantity of physical capital
The level of technological knowledge
C The inflation rate
C The price level
Suppose the economy produces real GDP of $30 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
112
108
104
100
10
20
30
40
50
60
70
80
OUTPUT (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
, which will:
O Shift the long-run aggregate supply curve to the left
O Not affect the long-run aggregate supply curve
C Shift the long-run aggregate supply curve to the right
PRICE LEVEL
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