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FREE RESPONSE FISCAL POLICY R Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes
FREE RESPONSE FISCAL POLICY R Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to "Calculate," you must show how you arrived at your final answer. The economy of Moneyland has an actual unemployment rate that is less than the natural unemployment rate. (a) Draw a correctly labeled graph of the long-run aggregate supply, short-run aggregate supply, and aggregate demand curves, and show each of the following. (i) Current price level, labeled PL1 (ii) Current real output, labeled Y1 (iii) Full-employment output, labeled YF a) Identify one fiscal policy action the government of Moneyland can use to restore full employment
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