Given AD 1and AS1, if the average price level in Figure 8.3 were at P3:Price LevelP₁100200300AS,AD,400Real Output(billions of dollars per year)AS,O The average price level would rise.The equilibrium price level would be P3.AD.A surplus would exist initially.The aggregate quantity demanded would exceed the aggregate quantitysupplied.

The aggregate demand curve depicts the total quantity of goods and services demanded at each price…

Answered: A surplus would exist The aggregate…

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A surplus would exist The aggregate quantit supplied. The average price leve The equilibrium price

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Given AD 1and AS1, if the average price level in Figure 8.3 were at P3:
Price Level
P₁
100
200
300
AS,
AD,
400
Real Output
(billions of dollars per year)
AS,
O The average price level would rise.
The equilibrium price level would be P3.
AD.
A surplus would exist initially.
The aggregate quantity demanded would exceed the aggregate quantity
supplied.

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