Suppose the economy begins at full employment. Label this st…

Suppоse the ecоnоmy begins аt full employment. Lаbel this stаrting point as point "1." Then, suppose that the minimum wage increases to $15 in the United States, which affects the entire labor market and increases the cost of production. Show the effects on your graph and label the new equilibrium point "2." Based on the above AD will [answer1] SRAS will [answer2] LRAS will [answer3] the price level (P) will [answer4] as we move from point 1 to point 2 the level of production (Q) will [answer5] as we move from point 1 to point 2. Lastly, suppose the Federal Reserve wants to keep prices in the economy as low as possible. Should the Fed intervene? If so, show the impact of successful monetary policy on your graph. Label this new equilibrium point "3." In this case, AD will [answer6] SRAS will [answer7] LRAS will [answer8] the price level (P) will [answer9] as we move from point 2 to point 3 the level of production (Q) will [answer10] as we move from point 2 to point 3.