Suppose that the aggregate demand and aggregate supply schedules

Suppose that the aggregate demand and aggregate supply schedules

Suppose that the aggregate demand and aggregate supply schedules

Suppose that the aggregate demand and aggregate supply schedules
for a hypothetical economy are as shown below:

Amount of
Real GDP
Demanded
(Billions)

Price
Level
(Price Index)

Amount of
Real GDP
Supplied
(Billions)

$100

300

$ 450

200

250

400

300

200

300

400

150

200

500

100

100

a. Use the data above to graph the aggregate demand and aggregate supply
curves.

Instructions:
1. Use the line tools called “AD” and “AS” to draw the
aggregate demand curve (plot 5 points total) and aggregate supply curve (plot 5
points total) given in the table above. To earn full credit for this graph you
must plot all required points for each curve.
2. Use the drop line
tool called “Eq” to indicate the equilibrium price level and the
equilibrium level of real output.
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What is the equilibrium price level and the equilibrium level of real output in
this hypothetical economy?

Equilibrium price level =

Equilibrium level of real output = $ billion

Is the equilibrium real output also necessarily the full-employment real
output?

b. If the price level in this economy is 150, will quantity demanded
equal, exceed, or fall short of quantity supplied?

By what amount? $ billion

If the price level is 250, will quantity demanded equal, exceed, or fall short
of quantity supplied?

By what amount? $ billion

c. Suppose that buyers desire to purchase $200 billion of extra real
output at each price level.

What is the new equilibrium price level and level of real output?

The new equilibrium price level =

The new level of real output = $ billion

 

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