Q27. Suppose the U.S. Congress passes significant immigration reform that makes it easier for foreigners to come to the United States to work. Use the AD/AS model to explain how this would affect the equilibrium level of GDP and the price level. A. Immigration reform as described should increase Aggregate Demand, shifting AD to the left, leading to a higher equilibrium GDP and a lower price level. B. Immigration reform as described should increase the labor supply, shifting AS to the right, leading to a higher equilibrium GDP and a lower price level. C. Immigration reform as described should increase the labor supply, shifting AS to the right, leading to a lower equilibrium GDP and higher price level.
Q27. Suppose the U.S. Congress passes significant immigration reform that makes it easier for foreigners to come to the United States to work. Use the AD/AS model to explain how this would affect the equilibrium level of GDP and the price level. A. Immigration reform as described should increase Aggregate Demand, shifting AD to the left, leading to a higher equilibrium GDP and a lower price level. B. Immigration reform as described should increase the labor supply, shifting AS to the right, leading to a higher equilibrium GDP and a lower price level. C. Immigration reform as described should increase the labor supply, shifting AS to the right, leading to a lower equilibrium GDP and higher price level.
Chapter10: Aggregate Demand And Supply
Section10.A: The Self Correcting Aggregate Demand And Supply Model
Problem 10SQ
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Q27. Suppose the U.S. Congress passes significant immigration reform that makes it easier for foreigners to come to the United States to work. Use the AD/AS model to explain how this would affect the equilibrium level of GDP and the price level.
A. Immigration reform as described should increase Aggregate Demand, shifting AD to the left, leading to a higher equilibrium GDP and a lower price level.
B. Immigration reform as described should increase the labor supply, shifting AS to the right, leading to a higher equilibrium GDP and a lower price level.
C. Immigration reform as described should increase the labor supply, shifting AS to the right, leading to a lower equilibrium GDP and higher price level.
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