Asked by Jenny
What happens if anything, to the unemployment rate when the long run aggregate supply curve increases?
I think it shifts to the right??
I need some help on this one.
I think it shifts to the right??
I need some help on this one.
Answers
Answered by
economyst
Employment is positively related to total output (GNP). (So, unemployment is therefore negatively related).
So, start with a graph of aggregate supply and demand, GNP on the x axis, prices on the y. Find equilibrium. Now increase supply -- shift the supply curve to the right.
What happens to GNP?
So, start with a graph of aggregate supply and demand, GNP on the x axis, prices on the y. Find equilibrium. Now increase supply -- shift the supply curve to the right.
What happens to GNP?
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