Suppose that deterioration in the education level of the, Ask an Expert

Economics

Suppose that deterioration in the education level of the U.S. population reduces the marginal product of labor. Also suppose that at the same time there is a rise in transfer payments (for example, for Social Security and Medicare) by the government.

With the help of an AD-AS graph, explain the effect of these shocks on the long-run equilibrium level of the price level and output. Use a long-run supply curve to answer this question.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9162207

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