Note:-Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate. Instructions: Enter your responses as whole numbers.a. What is the new equilibrium level of real output?$billionb. How large is the real GDP gap?$1billionc. Did average prices increase or decrease?DecreaseIncrease SAssume that the economy is at full-employment equilibrium at point A. Using the following graph as a reference, calculate the impactof a sudden decline in consumer confidence that reduces autonomous consumption by $200 billion at the price level PF AssumeMPC =0.5.PRICE LEVEL (average price)10090807060PF5040302010ASAD0200 250 300 350 400 450 500 550 600 650 700QREAL OUTPUT (in $ billions per year)

Aggregate demand (AD) is the total demand for goods and services in an economy at a given time and…

Answered: a. What is the new equilibrium level of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Note:-

Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.
Answer completely and accurate answer.
Rest assured, you will receive an upvote if the answer is accurate.

Instructions: Enter your responses as whole numbers.
a. What is the new equilibrium level of real output?
$
billion
b. How large is the real GDP gap?
$1
billion
c. Did average prices increase or decrease?
Decrease
Increase

S
Assume that the economy is at full-employment equilibrium at point A. Using the following graph as a reference, calculate the impact
of a sudden decline in consumer confidence that reduces autonomous consumption by $200 billion at the price level PF Assume
MPC =0.5.
PRICE LEVEL (average price)
100
90
80
70
60
PF50
40
30
20
10
AS
AD
0
200 250 300 350 400 450 500 550 600 650 700
Q
REAL OUTPUT (in $ billions per year)

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