9. Use this aggregate demand-aggregate supply schedule for a hypothetical econom
ID: 1124055 • Letter: 9
Question
9. Use this aggregate demand-aggregate supply schedule for a hypothetical economy to answer the following questions. Real domestic output demanded Real domestic output supplied in billions Price levein billions) 350 300 250 200 150 100 $9000 8000 7000 6000 5000 4000 $3000 4000 5000 6000 7000 8000 (a) What will be the equilibrium price level and quantity of real domestic output? (b) If the quantity of real domestic output demanded increased by $2000 at each price level, what will be the new equilibrium price level and quantity of real domestic output? (c) Using the original data from the table, if the quantity of real domestic output demanded increased by $5000 and the quantity of real domestic output supplied increased by $1000 at each price level, what would the new equilibrium price level and quantity of real domestic output be?Explanation / Answer
a) At equilibrium the quantity demanded is equal to the quantity supplied. From the table above we can see that quantity demannded is equalt to quantity supplied at 6000. And the price corresponding to this equlibrium quantity is 200.
B) New table :-
if quantity demanded is increased by 2000 at each price level then the new equlibrium would be 7000 at the equilibrium price of 250.
c)
5000
From the above new table we can see that equl=ilibrium quantity is 9000 at price 300.
Output demanded price Quantity supplied 5000 350 9000 6000 300 8000 7000 250 7000 8000 200 6000 9000 150 5000 10000 100 4000Related Questions
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