7. The long-run effects of monetary policy

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).

Which of the following statements are true based on these graphs? Check all that apply. The unemployment rate is currently 6% higher than the natural rate of unemployment. The current quantity of output is greater than potential output. The natural level of output is $9 trillion. Suppose the central bank of the economy increases 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, in the unemployment rate, and in real GDP