QUESTION 17Suppose the aggregate demand and short-run aggregate supply schedules for an economy whose potential output equals $2,700 are given by the table:Aggregate Quantity of Goods and ServicesPrice LevelDemandedSupplied0.50$3,500$1,0000.753,0002,0001.002,5002,5001.252,0002,7001.501,5002,800 What is the size of the recessionary gap?

Recessionary Gap occurs when Real GDP is less than the Potential GDP. Due to recessionary gap,…

Answered: Suppose the aggregate demand and…

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 17

Suppose the aggregate demand and short-run aggregate supply schedules for an economy whose potential output equals $2,700 are given by the table:

Aggregate Quantity of Goods and Services

Price Level Demanded Supplied

0.50 $3,500 $1,000

0.75 3,000 2,000

1.00 2,500 2,500

1.25 2,000 2,700

1.50 1,500 2,800

What is the size of the recessionary gap?

Aggregate Quantity of Goods and Services
Price Level	Demanded	Supplied
0.50	$3,500	$1,000
0.75	3,000	2,000
1.00	2,500	2,500
1.25	2,000	2,700
1.50	1,500	2,800

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