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Illustrate how each of the following events would shift the AS schedule and potential RGDP, thereby altering equilibrium prices and output levels in the economy. Use an aggregate supply-aggregate demand diagram in your explanation and assume that the economy is initially at full employment.
Note: Although some of the events listed below will also shift AD conditions in the economy, you do not need to show AD shifts in answering this question. We will discuss AD shifts in next week's lesson.
a) an increase in the general level of money wages
b) an increase in the price of imported oil and related energy products.
c) a decrease in the level of US interest rates
d) an increase in the productivity of labor
e) an increase in the expected inflation rate
f) an increase in the labor force growth rate
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