Graph it, and explain in words the sign of the slope. Graph the aggregate supply equation, and explain in words the sign of its slope. Calculate and graph output. Calculate the price and output levels associated with this new equilibrium. Give four different policies that could take the economy back to its long run equilibrium in a shorter period of time.
Authorities decide to apply monetary policy to get back to the natural rate of unemployment.
Explain your result in words and through a graph. Based on the previous scenario, explain the significance of expectations in policy making.