The following graphs show the state of an economy that is currently in long-run equilibrium. The first graph shows the aggregate demand (AD) and long-run aggregate supply (LRAS) curves. The second shows the long-run and short-run Phillips curves (LRPC and SRPC) LRAS AD LRAS AD 0 3 6 9 12 518 OUTPUT (Trillions of dollars)
LRPC SRPC LRPC C) SRPC 10 4 12 UNEMPLOYMENT (Percent)
Which of the following statements are true based on these graphs? Check all that apply. The natural rate of unemployment is 6%. It is impossible to determine the natural rate of unemployment from these graphs alone The natural level of output is 6%. Suppose the central bank of the economy decreases the money supply Show the long-run effects of this policy on both of the graphs by shifting the appropriate curves The long-run effect of the central bank’s policy is in the inflation rate, ーin the unemployment rate, and in real GDP.

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