a) Represent the above information in an appropriately labelled diagram. b) What are the short run equilibrium price level and aggregate output? c) Calculate the output gap, and state what type of gap the economy is facing.
a) Represent the above information in an appropriately labelled diagram. b) What are the short run equilibrium price level and aggregate output? c) Calculate the output gap, and state what type of gap the economy is facing.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter26: The Neoclassical Perspective
Section: Chapter Questions
Problem 21P: Use Table 26.3 to answer the following questions. Sketch an aggregate supply and aggregate demand...
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Question
![10. The table below shows the aggregate demand and short run aggregate supply schedules of India. The
potential aggregate output of India is 1050 billion rupees.
Aggregate Price Level
Real GDP demanded
Real GDP supplied in the
(billions of rupees)
short run (billions of
rupees)
100
1150
1050
110
1100
1100
120
1050
1150
130
1000
1200
140
950
1250
150
900
1300
160
850
1350
a) Represent the above information in an appropriately labelled diagram.
b) What are the short run equilibrium price level and aggregate output?
c) Calculate the output gap, and state what type of gap the economy is facing.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F51f0cb5c-84ea-470f-b110-df9744b3ff12%2Fd466c411-21d7-433b-b12c-c9c181f2d3c9%2F6dh0tqr_processed.png&w=3840&q=75)
Transcribed Image Text:10. The table below shows the aggregate demand and short run aggregate supply schedules of India. The
potential aggregate output of India is 1050 billion rupees.
Aggregate Price Level
Real GDP demanded
Real GDP supplied in the
(billions of rupees)
short run (billions of
rupees)
100
1150
1050
110
1100
1100
120
1050
1150
130
1000
1200
140
950
1250
150
900
1300
160
850
1350
a) Represent the above information in an appropriately labelled diagram.
b) What are the short run equilibrium price level and aggregate output?
c) Calculate the output gap, and state what type of gap the economy is facing.
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