Refer to Figure 5-1. Marginal social benefit is represented by which curve?

Which of the following events will increase long-run aggregate supply?

A) an increase in the interest rate B) an increase in resource prices C) a decrease in expected profit D) an advance in technology

Typical estimates of the sacrifice ratio suggest that a one-percentage-point reduction in the inflation rate requires

a. a sacrifice of 5 percent of annual output. b. a sacrifice of 5 percent of government spending. c. an increase in the unemployment rate of 5 percentage points. d. a 5 percent increase in the government budget deficit.