Let's say an economy begins in long-run equilibrium, as in this graph, and institutes an open-border immigration policy, which increases the labor supply. Also assume that the increase in consumption caused by the immigrants is offset by an identical increase in imports. Select a graph that shows how AD/AS would be affected. X Question 1 E A. XO B. c. Let's say an economy begins in long-run equilibrium, as in this graph, and institutes an open-border immigration policy, which increases the labor supply. Also assume that the increase in consumption caused by the immigrants is offset by an identical increase in imports. Select a graph that shows how AD/AS would be affected. O D. P E. P LRASI P AD1 RGDP LRAS 0 points None of the above. E LRAS E LRAS LRAS E K EL RGDP RGDP E LRAS P LE E LRAS AD1 AD AD RGDP RGDP AD2 AD1 X Question 3 An economy starts out in short-run and long-run equilibrium. If both short-run and long- run aggregate supply decrease, so that the economy remains in equilibrium: 0 points A. The real level of output will rise, and the price level will fall. B. The real level of output will rise, and the price level will rise. C. The real level of output will rise, and the nominal level will fall. D. The aggregate demand curve will have to shift. E. The real level of output will fall, and the price level will rise. X Incorrect X Question 4 0 points One of the primary limitations of the long-run AD/AS model of equilibrium is: A. full capacity is unknown. B. changes in aggregate demand do not allow identification of the long-run equilibrium level of output. C. full employment is unknown. D. it is a dynamic model, so it shows changes over time. E. it is a static model, so it shows moments in time. X Question 6 A large influx of new workers into an economy: X 0 points A. Will decrease AS, but increase long-run AS. B. Will increase AS, but decrease long-run AS. C. Will increase long-run AS, but not AS. D. Will increase AS, but not long-run AS. E. Will increase AS and long-run AS. X Incorrect X Question 7 0 points An economy starts out in short-run and long-run equilibrium. If both short-run and long- run aggregate supply increase, so that the economy remains in equilibrium: A. The real level of output will rise, and the price level will rise. B. The real level of output will fall, and the price level will rise. C. The aggregate demand curve will have to shift. D. The real level of output will rise, and the nominal level will fall. E. The real level of output will rise, and the price level will fall. X Question 11 If an economy starts out in long-run equilibrium and people become more optimistic about the future of the economy, this will lead to: XO A. A decrease in real output, an increase in the price level, increasing wages, and an increase in real output to return to long-run equilibrium. 0 points B. An increase in real output, a increase in the price level, increasing wages, and a decrease in real output to return to long-run equilibrium. C. An increase in real output, a decrease in the price level, decreasing wages, and a decrease in real output to return to long-run equilibrium. D. A decrease in real output, an increase in the price level, decreasing wages, and an increase in real output to return to long-run equilibrium. E. A decrease in real output, a decrease in the price level, decreasing wages, and an increase in real output to return to long-run equilibrium. X Incorrect X Question 12 A decrease in workers' wages: 0 points A. Will increase AS, but not long-run AS. B. Will increase AS but decrease long-run AS. C. Will decrease AS but increase long-run AS. D. Will increase long-run AS but not AS. E. Will increase AS and long-run AS. X Question 14 If an economy begins in long-run equilibrium, like the one graphed here, where does it end up if there is a sudden decline in consumer confidence? From the following graphs select the graph that illustrates this. P LRAS LF. AD A. XO B. O C. D. E. 2 P P P RGDP LRAS1 6 LRAS LRASZ 0 points Ez E E LRAS E LRAS AD RGDP AD1 LRAS Ez RGDP E AD RGDP AD2 AD RGDP The economy would remain at point E-