Questions 3 and 4 3. Suppose that the aggregate demand and aggregate supply schedules for a hypothetical economy are as shown in the following table. LO7.3Page 169Amount ofAmouReal GDPRealDemanded,Price LevelSuppliedBillions(Price Index)Billions$100300$450200250400300200300400150200500100100a. Use the data above to graph the aggregate demand and aggregate supply curves. What is the equilibrium price level and the equilibrium level of real output in thishypothetical economy? Is the equilibrium real output also necessarily the full-employment real output?b. If the price level in this economy is 150, will quantity demanded equal, exceed, or fall short of quantity supplied? By what amount? If the price level is 250, will quantitydemanded equal, exceed, or fall short of quantity supplied? By what amount?c. Suppose that buyers desire to purchase $200 billion of extra real output at each price level. Sketch in the new aggregate demand curve as AD1. What is the new equilibriumprice level and level of real output?4. Suppose that the following table shows an economy's relationship between real output and the inputs needed to produce that output: LO7.3Input QuantityReal GDP150.0$400112.530075.0200a. What is productivity in this economy?b. What is the per-unit cost of production if the price of each input unit is $2?c. Assume that the input price increases from $2 to $3 with no accompanying change in productivity. What is the new per-unit cost of production? In what direction wouldthe $1 increase in input price push the economy's aggregate supply curve? What effect would this shift of aggregate supply have on the price level and the level of realoutput?d. Suppose that the increase in input price does not occur but, instead, that productivity increases by 100 percent. What would be the new per-unit cost of production? Whateffect would this change in per-unit production cost have on the economy's aggregate supply curve? What effect would this shift of aggregate supply have on the pricelevel and the level of real output?

Aggregate demand is the total demand for goods and services in an economy at the given price level.…

3. Suppose that the aggregate demand and aggregate supply schedules for a hypothetical economy are as shown in the following table. LO7.3 Page 169 Amou Real Supplied Billions Amount of Real GDP Price Level Demanded, Billions (Price Index) $100 300 $450 200 250 400 300 200 300 400 150 200 500 100 100 a. Use the data above to graph the aggregate demand and aggregate supply curves. What is the equilibrium price level and the equilibrium level of real output in this hypothetical economy? Is the equilibrium real output also necessarily the full-employment real output? b. If the price level in this economy is 150, will quantity demanded equal, exceed, or fall short of quantity supplied? By what amount? If the price level is 250, will quantity demanded equal, exceed, or fall short of quantity supplied? By what amount? c. Suppose that buyers desire to purchase $200 billion of extra real output at each price level. Sketch in the new aggregate demand curve as AD1. What is the new equilibrium price level and level of real output?

3. Suppose that the aggregate demand and aggregate supply schedules for a hypothetical economy are as shown in the following table. LO7.3 Page 169 Amou Real Supplied Billions Amount of Real GDP Price Level Demanded, Billions (Price Index) $100 300 $450 200 250 400 300 200 300 400 150 200 500 100 100 a. Use the data above to graph the aggregate demand and aggregate supply curves. What is the equilibrium price level and the equilibrium level of real output in this hypothetical economy? Is the equilibrium real output also necessarily the full-employment real output? b. If the price level in this economy is 150, will quantity demanded equal, exceed, or fall short of quantity supplied? By what amount? If the price level is 250, will quantity demanded equal, exceed, or fall short of quantity supplied? By what amount? c. Suppose that buyers desire to purchase $200 billion of extra real output at each price level. Sketch in the new aggregate demand curve as AD1. What is the new equilibrium price level and level of real output?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter23: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 5PA

See similar textbooks

Similar questions

Need help with these 2 questions for english class.
Please I need an explanation on this question. Thank you
5. Refer to the data in the table that accompanies problem 2. Suppose that the present equilibrium price level and level of real GDP are 100 and $225, and that data set B represents the relevant aggregate supply schedule for the economy. LO12.6 a. What must be the current amount of real output demanded at the 100 price level? b. If the amount of output demanded declined by $25 at the 100 price level shown in B, what would be the new equilibrium real GDP? In business суcle economists call this change in real terminology, what would GDP?
Suppose aggregate demand in the economy sharply decines. Keynesian economists say that the price level (at least for a time) will and real output wil O remain constant; decrease Increase; remain constant remain constant; increase decrease; remain constant lo000
I help on question 7 understand review
demanded equal, exceed, or fall short of quantity supplied? llowing L012.4 c. Suppose that buyers desire to purchase $200 billion of extra real output at each price level. Sketch in the new aggregate By what amount? demand curve as AD,. What are the new equilibriumsate Real GDP level and level of real output? 4. Suppose that the table presented below shows an economy's relationship between real output and the inputs needed to pro- 225 225 duce that output: LO12.4 225 Real GDP 225 Input Quantity 150.0 $400 in the t run? 112.5 300 75.0 200 ut per a. What is productivity in this economy? b. What is the per-unit cost of production if the price of each input unit is $2? c. Assume that the input price increases from $2 to $3 with no accompanying change in productivity. What is the new per- unit cost of production? In what direction would the $1 increase in input price push the economy's aggregate supply curve? What effect would this shift of aggregate supply have on the price level and the…
: Which of the following statements is true if there is an increase in aggregate demand while the economy is in equilibrium on a positively sloping short-run aggregate supply curve? 3 - O a) Prices rise, national income does not change B) Prices decrease, national income does not change O C) Prices go up and national income goes down. O D) Prices decrease and national income decreases. O TO) Prices rise, national income rises
The data in the above table show that the unemployment rate is currently above its full -employment level. Question 1 options: 1) True. 2) False.
Which of the following statements is correct? O A. The price level does not effect the level of real GDP demanded. O B. The higher the price level, the more.the aggregate demand curve shifts rightward. OC. The lower the price level, the greater the quantity of real GDP demanded O D. The lower the price level, the more the aggregate demand curve shifts leftward. E. The lower the price level, the more the aggregate demand curve shifts rightward.
Which of the following changes in personal income tax would lead to the smallest increase in consumption? O a. O b. a $15 000 decrease in taxes, if MPC equals 0.6 O c. a $30 000 decrease in taxes, if MPC equals 0.25 Oe. a $20 000 decrease in taxes, if MPC equals 0.5 O d. a $12 000 decrease in taxes, if MPC equals 0.75 a $10 000 decrease in taxes, if MPC equals 0.2
2
Consider the following graph. Suppose the economy is currently at point A. Suppose there is a temporary decrease in the prices of raw materials. (Raw materials are used for production.) The economy will go to point, in short run, and then point in long run. Price level O C; B OB;A OB; C O CA ODA Question 2 LRAS - O vertical straight; increase by 10 percent O upward sloping: decrease by 10 percent O vertical straight; remain unchanged O downward sloping: increase by 10 percent Odownward sloping: decrease by 10 percent SRAS₁ SRAS AD Real GDP (Y) 4 LRAS is a(n) line. If the price level drops by 10 percent, then all else being equal, the long- run quantity of aggregate supply will