Describe two national policies which might help the LRAS curve to shift out and to the right, and then describe two national policies which might result in the LRAS curve shifting in and to the left.

Your submission should be about 2 pages (normal fonts and margins, double spaced). This assignment requires that you do basic internet research. Your assignment response should be in the form of economic analysis, not personal opinion or belief.

Baby boomers are always commenting on how cheap items were back when they were kids. Pick three basic, everyday items and research to find a rough average price for that item back in 1962. (FYI, the oldest of the Baby Boomers would have been 16 and the youngest were not yet even born.) Then, find out how much that item cost now. Do some additional research and find out what the CPI was in 1962 and what it is expected to be in 2022. Take the 1962 cost of your items and calculate what the price would be today if the cost of the item kept pace with inflation–meaning that the price of the item went up the same amount as the CPI. Finally, for each of your products, comment on why the item’s price did or did not keep up with inflation. For example, if a product’s price increased but by an amount less than inflation, why do you think the real price fell? Conversely, if the current price exceeds the effects of inflation, explain why the real price rose. (HINT: think back to basic supply and demand analysis and what would cause equilibrium price to fall or rise.)

The Potential GDP of an economy can be depicted as its vertical Long Run Aggregate Supply Curve. Describe two national policies which might help the LRAS curve to shift out and to the right, and then describe two national policies which might result in the LRAS curve shifting in and to the left. Overall, do you think economists predict that the U.S. LRAS curve will move left or right based on the policies you described? Watch your word count and include an outside source.

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