Significant productivity improvements occur and the

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Significant productivity improvementsoccur, and the quantity of money in circulation increases:
b.No new capital investment takesplace, and a fraction of the existing capital stock depreciates and becomes unusable. At the sametime, the government imposesa large tax increaseonthenation's households:
c. More efficient techniques for producing goods and services are adopted throughout the economy at the same time that the government reducesits spending on goods and services. E.Suppose that the productive capacity of the economy increases by50% but that there are no other changes.1.) Using the line drawing tool, show the effect on the economy. Properly label your new line.2.) Using the point drawing tool, show the new equilibrium price level and output. Label the point E2.Carefully follow the instructionsabove, and only draw the required objects. The situation shown above is called
Initially, an economy is in long-run equilibrium with a real GDP of $4 trillion.Suppose that increases in marginal tax rates on wages reduce the supply of labor.1.)Using the line drawing tool, show the effect on the economy. Properly label your new line.2.) Using the point drawing tool, show the new equilibrium price level and output. Label the point E2.Carefully follow the instructions above, and only draw the required objects. The situation shown above can be described as
Your answer is correct.
Initially, an economy is inlong-run equilibrium with a real GDP of$4 trillion.Suppose that people desire to purchase more goods andservices, but there is no change in the productive capacity of the economy.1.) Using the line drawing tool, show the effect on the economy. Properly label your new line.2.) Using the point drawing tool, show the new equilibrium price level and output. Label the point E2. Carefully follow the instructionsabove, and only draw the required objects.The situation shown above can be described asA.supply-side deflation.B.secular deflation.C.supply-side inflation.D.demand-side inflation.

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