Use the hypothetical economy data in the table below to answer the following que

Question

Use the hypothetical economy data in the table below to answer the following questions. Amount of Real GDP Demand, in Billions Price Level (Price Index) Amount of Real GDP Supplied, in Billions $180 300 $500 260 250 400 300 200 300 420 150 200 560 100 100 a) What is the equilibrium price level and the equilibrium level of real output in this hypothetical economy? Use Excel to graph both the aggregate demand and aggregate supply curves. Can there be equilibrium level of output at below full employment? b) At what price level will aggregate supply FALL BELOW [equal] aggregate demand? At what price level will demand fall below aggregate supply? If given a price level of 250, will aggregate demand exceed supply? c) If the aggregate demand schedule shifted by $140 billion to the right at every level, what would be the new equilibrium level of income?

Explanation / Answer

Equilibrium Price level in an economy is the point where both the aggregate demand and the aggregate supply curves meet each other. At this poitn there is balance between the demand and supply in the market.
The given question mentions the amount of Real GDP supplied but dies not point the exact aggregate demand and supply levels to calculate the equilibrium.

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