The graph below shows the AD-AS diagram for Spain. All numbers are in billions.1. What is the size of real GDP in the short-run equilibrium? answer "a". 2. What is the price level in the short-run equilibrium? answer "b". 3. What is the level of Potential GDP in Spain? answer "c". Coursework - Take Test View X C Consider the aggregate econ × | Q Chapter 8 The Aggregate Der x b My Questions | bartleby Xlive.hssu.edu/ICS/Academics/ECON/ECON0204_UG22/FA_2022_UNDG-ECON0204_UG22_-50/Coursework.jnz?portlet=Coursework&screen=Take TestView&s...← → CTEST 3 (Final)Test in TEST 3Time Remaining:30 minutesSection 4Time limit:Length:Scored out of:1 hour 30 minutes 24 questions 150 Points16) The short run aggregate supply (SRAS) curve is a(n).long run aggregate supply (LRAS) curve is a(n)between wages and prices.vertical; upwardly sloping✔upwardly sloping; verticalSave Progress Last Saved: 3:11 PMhorizontal; upwardlyslopingvertical; horizontal17) Consider if consumers increase spending and if the aggregate supply curve remainsunchanged, then what will happen to aggregate demand and real GDP?✔ The aggregate demand will increase and real GDP will increase.The aggregate demand will increase and real GDP will remainthe same.The aggregate demand will decrease and real GDP will remainthe same.The aggregate demand will decrease and real GDP will decrease.A decrease in net exports.An increase in net exportsA decrease in businessinvestment.An increase in net imports18) All things being equal, which event will shift the aggregate demand (AD) curve to the (5pts)right?curve due to sticky wages and the (4pts)curve due to the flexibility and a balance19) The graph below shows the AD-AS diagram for Spain. All numbers are inbillions.1. What is the size of real GDP in the short-run equilibrium? answer "a".2. What is the price level in the short-run equilibrium? answer "b".AD;right3. What is the level of Potential GDP in Spain? answer "c".Image gallery(click for full size)☐AS;right20) When an economy's output decrease and the price level decrease, theshifted to the☐AS: left☐AD; left> Exit this TestType here to search(15pts)Test Pages1 | 2 | 3 | 4 | 5 | 6curve has(5pt:(5pt11001000-Price Level900800AD700-600-500-SRAS400-300-200-100-Next ▶100i200 300Real GDP400500mLRAS600XC Chegg Search700 800 900 1000W110CLOSE X444X(8)ក<T3:12 PM12/3/20226

The government regularly interferes in the market to prevent any malpractices like decrease in competition .The major reason behind the central bank intervention is to stable the economy .For example-If price rises in the economy, then government implements the policies that decrease the inflation.(a)The curve that shows the supply of producer at different price level is known as AS (aggregate supply) curve .The curve that shows the demand at different price level is called AD( aggregate demand ) curve Given that the P( prices) on the vertical axis(Va) and output on horizontal axis.(Ha) .The aggregate demand curve is AD and SRAS is aggregate supply curve in short run. The equilibrium in short run occurs at a point where AD (aggregate demand curve)and SRAS intersects .The quantity in short run is 200. Thus, equilibrium quantity in short run is 200 (b) Given that the P( prices) on the vertical axis(Va) and output on horizontal axis.(Ha) . The aggregate demand curve is AD and SRAS aggregate supply curve is in short run. The equilibrium in short run occurs at a point where SRAS and AD intersects .The price in short run is 600. Thus, equilibrium price in short run is 600 (c) The output that an economy can attain if all resources are employed correctly is known as potential output. In the given diagram ,the aggregate demand curve is AD and LRAS is the aggregate supply curve in long run. Potential level of output is where LRAS(long run aggregate supply ) curve and AD(aggregate demand) curve are interesecting.Countries compare their output to the potential output in order to make improvement and increase the GDP in the country . Thus, the potential level of output is 600 units.(a)The equilibrium in short run is attained where SRAS and AD curve are intersecting. The short run equilibrium output is 200 units. (b)The equilibrium in short run is attained where AD and SRAS curve are intersecting. The equilibrium price in short run is 600 . (c) The potential level of Y(output )is 600 units.