In 2001, the economy of Boxtown had an aggregate demand and aggregate supply according to the following schedule:price levelaggregate demandshort-run aggregate supplylong-run aggregate supply70$1275$1005$130080$1250$1070$130090$1225$1135$1300100$1200$1200$1300110$1175$1265$1300120$1150$1330$1300130$1125$1395$1300What was Boxtown’s short-run equilibrium output in 2001?If Boxtown cut taxes, how would short-run equilibrium quantity change?Increase/Decrease

Short-Run equilibrium is a situation where the price level is such that the quantity supplied must…

Answered: In 2001, the economy of Boxtown had an…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4: Estimating Demand

Section: Chapter Questions

Problem 6E

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In 2001, the economy of Boxtown had an aggregate demand and aggregate supply according to the following schedule:

price level	aggregate demand	short-run aggregate supply	long-run aggregate supply
70	$1275	$1005	$1300
80	$1250	$1070	$1300
90	$1225	$1135	$1300
100	$1200	$1200	$1300
110	$1175	$1265	$1300
120	$1150	$1330	$1300
130	$1125	$1395	$1300

What was Boxtown’s short-run equilibrium output in 2001?

If Boxtown cut taxes, how would short-run equilibrium quantity change?
Increase/Decrease

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