In 2014, the economy of Greatstown had an aggregate demand and aggregate supply according to the following schedule:Price LevelAggregated Demand Short-run Aggregate SupplyLong-run aggregate supply30$1455$1275$140040$1420$1300$140050$1385$1325$140060$1350$1350$140070$1315$1375$140080$1280$1400$140090$1245$1425$1400Calculate Greatstown’s output gap.

The long-run aggregate supply curve shows the potential output of the economy in the long run. It…

Answered: In 2014, the economy of Greatstown had…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In 2014, the economy of Greatstown had an aggregate demand and aggregate supply according to the following schedule:

Price Level	Aggregated Demand	Short-run Aggregate Supply	Long-run aggregate supply
30	$1455	$1275	$1400
40	$1420	$1300	$1400
50	$1385	$1325	$1400
60	$1350	$1350	$1400
70	$1315	$1375	$1400
80	$1280	$1400	$1400
90	$1245	$1425	$1400

Calculate Greatstown’s output gap.

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