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Posted by on Wednesday, October 29, 2008 at 8:43pm.

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.

  • Macro Economics - , Thursday, October 30, 2008 at 8:54am

    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?

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