In the figure above, AD1, LRAS1 and SRAS1 denote AD, LRAS an…
In the figure above, AD1, LRAS1 and SRAS1 denote AD, LRAS and SRAS in year 1, while AD2, LRAS2 and SRAS2 denote AD, LRAS and SRAS in year 2. Given the economy is at point A in year 1, what will happen to the unemployment rate in year 2?