Suppose that the economy is depicted in the graph to the right.160-a. The current equilibrium price level and output level respectively are: andS trillion. (Enter your response as a whole number.)SRAS150-LRAS140-130-120-O 110-100-소 90-80-70-AD60-50-40-10' 12' 14 1618 20Real GDP ($ trillions)Price level

Equilibrium price level is 100.

Suppose that the economy is depicted in the graph to the right. 160- a. The current equilibrium price level and output level respectively are:O and $ trillion. (Enter your response as a whole number.) SRAS 150- LRAS 140- 130- 120- E 110- 100- 90- 80- 70- AD 60- 40- Real GDP (S trillions)

Suppose that the economy is depicted in the graph to the right. 160- a. The current equilibrium price level and output level respectively are:O and $ trillion. (Enter your response as a whole number.) SRAS 150- LRAS 140- 130- 120- E 110- 100- 90- 80- 70- AD 60- 40- Real GDP (S trillions)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Suppose that the economy is depicted in the graph to the right.
160-
a. The current equilibrium price level and output level respectively are: and
S trillion. (Enter your response as a whole number.)
SRAS
150-
LRAS
140-
130-
120-
O 110-
100-
소 90-
80-
70-
AD
60-
50-
40-
10' 12' 14 16
18 20
Real GDP ($ trillions)
Price level

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illustrates and how it is related to the aggregate demand curve. 3. Figure 11.8 shows the aggregate expenditure curve when the price level is 110. When the price level rises to 120, the AE curve shifts vertically downwards from AE, by $1 trillion. When the price level falls to 100, the AE curve shifts vertically upwards from AE, by $1 trillion. Figure 11.8: FIGURE 11.8 Short Answer Problem 10 (a) 8 Price level (GDP deflator) Aggregate planned expendit (trillions o FIGURE 11.9 Short Answer Problem 10 (b) 130 a. Draw two new AE curves in figure 11.8 for the price levels of 100 and 120. What are the equilibrium levels of aggregate expenditures for these two price levels? Label as 'b' the equilibrium point when the price level is 100 and 'c' as price level is 120. 120 b. Use figure 11.8 to obtain three points 'a', 'b' and 'c' on the aggregate demand curve. Plot these three points on figure 11.9. Assume that the aggregate demand curve is linear and draw the AD curve on figure 11.9. Figure…
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