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.

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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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