The following AD-AS diagram is only for the next questions 21-24 only. LRAS P B at...

 

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The following AD-AS diagram is only for the next questions 21-24 only. LRAS P B at D e Y A E SRAS₁ SRAS2 SRAS3 AD Y 21. In the graph above, assume that the economy is currently in point B. In this situation, if the government does not take any policy measures to bring the economy to the full-employment level of output, the economy will move toward point_ in the long run. 22. (Continue to use the above graph) Again, assume that the economy is currently in point B. Now, the Fed wants to stabilize the output (that is, maintain the output at the full- employment level) by conducting monetary policy. Then the new equilibrium output will be 23. (Continue to use the above graph) Now assume that the economy starts at point A and there is a favorable supply shock. In this situation, point point represents short-run equilibrium and represents long-run equilibrium in the absence of government intervention. 24. (Continue to use the above graph) Assume that initial equilibrium (before the supply shock) is point A. Now faced with the favorable supply shock, the Fed wants to stabilize the output (that is, maintain the output at the full-employment level) by conducting monetary policy. Then the new equilibrium output will be at The following AD-AS diagram is only for the next questions 21-24 only. LRAS P B at D e Y A E SRAS₁ SRAS2 SRAS3 AD Y 21. In the graph above, assume that the economy is currently in point B. In this situation, if the government does not take any policy measures to bring the economy to the full-employment level of output, the economy will move toward point_ in the long run. 22. (Continue to use the above graph) Again, assume that the economy is currently in point B. Now, the Fed wants to stabilize the output (that is, maintain the output at the full- employment level) by conducting monetary policy. Then the new equilibrium output will be 23. (Continue to use the above graph) Now assume that the economy starts at point A and there is a favorable supply shock. In this situation, point point represents short-run equilibrium and represents long-run equilibrium in the absence of government intervention. 24. (Continue to use the above graph) Assume that initial equilibrium (before the supply shock) is point A. Now faced with the favorable supply shock, the Fed wants to stabilize the output (that is, maintain the output at the full-employment level) by conducting monetary policy. Then the new equilibrium output will be at