Suppose that the aggregate demand and aggregate supply schedules for a hypotheti

Question

Suppose that the aggregate demand and aggregate supply schedules for a hypothetical economy are as shown below: Amount of Real GDP Price Level (Price Index) Amount of Real GDP Demanded Billions Supplied Billons $100 300 $450 200 250 400 300 200 300 400 150 200 500 100 100 a. Use these sets of data to graph the aggregate demand and aggregate supply curves. What is the equilibrium price level and the equilibrium level of real output in this hypothetical economy? Is the equilibrium real output also necessarily the full-employment real output?

Explanation / Answer

aggregate price level= 100+450+250+300+300+150+500 / 6 =341.67 real output= 300+200+400+200+400+200+100 /6= 300

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