Unformatted text preview: that employ workers. That would decrease the supply of the product. An increase in wages will raise prices. Aggregate supply from SRAS1 to SRAs2 decreases (b). Prices levels are higher, for P1 toP2 but output is even lower for Y1 toY2(3). If the NRA supply restrictions become permanent, potential output would decline as well (c) Price Level (P) LRAS SRAS 2 SRAS 1 point B P2 P1 Point A AD Y2 Y1 Real GDP (Y)...
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- Winter '12