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Instructions: For each of the following, illustrate and explain the changes to AD and AS, output, price levels and employment that will occur in the

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Instructions: For each of the following, illustrate and explain the changes to AD and AS,

output, price levels and employment that will occur in the short-run and in the long-run. Assume

that wages are "sticky" in the short-run and "flexible" in the long-run.

3. The government raises the minimum wage.

Explain the short-run and long-run consequences of the change described above:

image text in transcribed
The United States Economy PL LRAS SRAS Pe AD Yfe rGDP

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