Please answer everything in the photos including the graph. On the following graph, plot the aggregate demand curve that results from varying the price level from 110 to 130 to 150, holding all else equal.Hint: Real income and the quantity of output are equivalent. For example, a real income of $100 billion is the same as a quantity of output of $100billion.PRICE LEVEL160150140130120 +110100900200300400500 600 700QUANTITY OF OUTPUT (Billions of dollars)100800OAggregate Demand (AD)? The following graph plots three planned expenditure lines for a hypothetical economy, each associated with a different price level. The line labeledPE130 corresponds to a price level of 130; the line labeled PE110 corresponds to a price level of 110; and the line labeled PE150 corresponds to aprice level of 150. The graph also includes the 45-degree line that plots all points at which planned expenditure equals real income.PLANNED EXPENDITURES (Billions of dollars)800700600 +50040030020010000100200400500600300REAL INCOME (Billions of dollars)At a price level of 110, the level of equilibrium output isPE (P=110)PE (P=130)PE (P=150)700800

Demand refers to the willingness and ability of the consumer to purchase goods and services at given…

On the following graph, plot the aggregate demand curve that results from varying the price level from 110 to 130 to 150, holding all else equal. Hint: Real income and the quantity of output are equivalent. For example, a real income of $100 billion is the same as a quantity of output of $100 billion. PRICE LEVEL 160 150 140 130 120 110 + 100 90 0 200 300 400 500 600 QUANTITY OF OUTPUT (Billions of dollars) 100 700 800 O Aggregate Demand (AD) ?

On the following graph, plot the aggregate demand curve that results from varying the price level from 110 to 130 to 150, holding all else equal. Hint: Real income and the quantity of output are equivalent. For example, a real income of $100 billion is the same as a quantity of output of $100 billion. PRICE LEVEL 160 150 140 130 120 110 + 100 90 0 200 300 400 500 600 QUANTITY OF OUTPUT (Billions of dollars) 100 700 800 O Aggregate Demand (AD) ?

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section: Chapter Questions

Problem 1TY

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