Suppose that the aggregate demand and aggregate supply schedules for a hypothetical economy are as shown in the following table Amount of Price Level Amount of Real GDP (Price Index) Real GDP Demanded, Supplied, Billions Billions $100 300 $450 200 250 400 300 200 300 400 150 200 500 100 100 a. Use the data above to graph the agregate demand and aggregate supply curves. What are the equilbrium price level and the equilbrium level of real output in this hypothetical economy? Is the equilibrium real output also necessarily the full-employment real output? b. If the price level in this economy is 150, will quanity demanded equal, exceed, or fall short of quantity supplied? By what amount? If the price level is 250, will quantity demanded equal, exceed, or fall short of quantity supplied? By what amount? c. Suppose that buyers desire to purchase $200 billion of extra real output at each price level. Sketch in the new aggregate demand curve as AD1. What are the new equilibrium price level and level of real output?
- Suppose that the aggregate
demand andaggregate supply schedules for a hypothetical economy are as shown in the following table
Amount of
Real
Demanded, Supplied,
Billions Billions
$100 300 $450
200 250 400
300 200 300
400 150 200
500 100 100
a. Use the data above to graph the agregate demand and
b. If the price level in this economy is 150, will quanity demanded equal, exceed, or fall short of quantity supplied? By what amount? If the price level is 250, will quantity demanded equal, exceed, or fall short of quantity supplied? By what amount?
c. Suppose that buyers desire to purchase $200 billion of extra real output at each price level. Sketch in the new aggregate demand curve as AD1. What are the new
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