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Suppose the Fed doubles the growth rate of the quantity of money in the economy. In the long run, the increase in money growth will change which of the following? Check all that apply.
The level of technological knowledge
The inflation rate
The quantity of physical capital
The size of the labor force
Suppose the economy produces real GDP of $50 billion when unemployment is at its natural rate. Use the purple points (diamond symbols) to plot the economy's long-run aggregate supply (LRAS) curve on the graph.

Answer :

DevanshChhgo

If the Fed doubles the growth rate of the quantity of money in the economy the quantity of physical capital will increase.

What is physical capital?

One of what economists refer to as the three primary components of production is physical capital. It consists of material things made by people that are used in the production of commodities or services. A company's physical capital is made up of its equipment, structures, office and warehouse supplies, cars, and computers. Physical capital is one of the three factors of production according to economic theory. Physical capital is made up of physical, man-made items that businesses invest in or purchase and employ to manufacture things. Physical capital assets that are reusable and not consumed during production, such as manufacturing equipment, also fall under the category of fixed capital.

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