Assume that the diagram that follows depicts aggregate supply and demand conditions in an economy. Full employment occurs when $6 trillion of real output is produced. What is the equilibrium rate of output? b. How far short of full employment is the equilibrium rate of output? а. с. Illustrate a shift of aggregate demand that would change the equilibrium rate of output to $6 trillion. Label the new curve AD2. d. What is the price level at the new equilibrium? Illustrate a shift of aggregate supply (AS2) that would, when combined with AD1, move equilibrium output to $6 trillion. f. е. What is the price level at this new equilibrium? AS, 250 240 230 220 210 AD, 200 190 180 170 160 150 140 130 120 110 100 3 P.16 REAL OUTPUT (in S trilions per year) PRICE LEVEL (average price)

Assume that the diagram that follows depicts aggregate supply and demand conditions in an economy. Full employment occurs when $6 trillion of real output is produced. What is the equilibrium rate of output? b. How far short of full employment is the equilibrium rate of output? а. с. Illustrate a shift of aggregate demand that would change the equilibrium rate of output to $6 trillion. Label the new curve AD2. d. What is the price level at the new equilibrium? Illustrate a shift of aggregate supply (AS2) that would, when combined with AD1, move equilibrium output to $6 trillion. f. е. What is the price level at this new equilibrium? AS, 250 240 230 220 210 AD, 200 190 180 170 160 150 140 130 120 110 100 3 P.16 REAL OUTPUT (in S trilions per year) PRICE LEVEL (average price)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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