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Question 1

The graph below shows the AD-AS diagram for the US. Suppose that the economy experiences a positive aggregate supply shock denoted by the move from SRAS1 to SRAS2.

Note that the new curve is shown in gray.

What happened to the cyclical unemployment in the US?

 

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Question 2

What happened to the frictional unemployment in the US?

 

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Question 3

What happened to the structural unemployment in the US?

 

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Question 4

What happened to the price levels in the US?

 

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