If the (short-run) IS-LM intersection is to the right of long-run aggregate supply, what happens in the long run: Which of the below is the right answer? 1. productivity will improve, which will increase long-run aggregate supply . 2. the aggregate price level will fall, which will shift the LM curve up and to the left. 3. the aggregate price level will increase, which will shift the LM curve up and to the left. 4.the unemployment rate is higher than the natural rate of unemployment
If the (short-run) IS-LM intersection is to the right of long-run aggregate supply, what happens in the long
run:
Which of the below is the right answer?
1. productivity will improve, which will increase long-run aggregate supply .
2. the aggregate price level will fall, which will shift the LM curve up and to the left.
3. the aggregate price level will increase, which will shift the LM curve up and to the left.
4.the unemployment rate is higher than the natural rate of unemployment
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