Assume the economy is currently in long-run equilibrium. An increase in the money supply will affect unemployment in the short run and in the long run in which of the following ways?

Answers

Answer 1

A money supply go up and be inflationary in nature if the unemployment rate is below the natural rate and thus there will be high rate of unemployment.

What does it implies when the economy is in long run equilibrium?

An economy that is to be in long-run equilibrium will have the real unemployment rate to be equal to that of natural rate of unemployment.

Note that a boast in the money supply will influence unemployment based on the fact that unemployment rate is bigger than the natural rate of unemployment, and thus the rate of inflation is said to be going done.

When the level of output is higher than employment output, an unemployment rate tends to increase and thus pressure is placed on increased wages and prices.

Conclusively, Note that Lower unemployment rate will lead to lower presence of workers in the companies .

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Related Questions

Which development would most likely cause the supply of a product to
increase?
A. Government regulations increase the cost of making the product.
B. New technology allows the product to be made more quickly.
C. Companies expect the price of the product to fall significantly.
OD. Fewer workers receive the education needed to create the product.
SUBMIT

Answers

Answer:

B: New technology allows the product to be made quicker

If a product can be made quicker, you can make more products in less time, resulting in more supply/stock.

New technology allows the product to be made more quickly. The correct option is B.

What is technology?

The tools, methods, and systems used to create, process, store, and exchange information, or to perform tasks that make life easier and more efficient, are referred to as technology.

Because it improves the efficiency of the manufacturing process, the development of new technology that allows a product to be manufactured more quickly can increase the supply of that product.

Lowering production costs can make it more profitable for producers to supply more product to the market.

As a result, they may increase production to meet rising demand or to take advantage of lower production costs, resulting in an increase in product supply.

Thus, the correct option is B.

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