2a) You have the following information about aggregate demand and aggregate supply.Complete the table. Aggregate supply is Y=2+PL2 Amounts are in millions of dollarsPricelevel$2CGMADAS$10 $5$8 $7 $2 28$3$8$4 $6 $6 $3 21$4$6$4$8$4 $4 1816$5$4$3$7 $3 $5 1221$6$2$3$4$3 | S6 |し38出4b) Macroeconomic equilibrium occurs at a price-level ofand an output level of h units

Aggregate demand is the sum of consumption, investment, government spending and net exports.

2a) You have the following information about aggregate demand and aggregate supply. Complete the table. Aggregate supply is Y=2+PL2 Amounts are in millions of dollars Price level $2 G M AD AS $10 $5 $8 $7 $2 38 $3 $8 $4 $6 $6 $3 21 $4 $6 $4 $8 $4 $4 18 16 $5 $4 $3 $7 $3 $5 12 21 $6 $2 $3 $4 $3 $6 38 出4 b) Macroeconomic equilibrium occurs at a price-level of and an output level of

2a) You have the following information about aggregate demand and aggregate supply. Complete the table. Aggregate supply is Y=2+PL2 Amounts are in millions of dollars Price level $2 G M AD AS $10 $5 $8 $7 $2 38 $3 $8 $4 $6 $6 $3 21 $4 $6 $4 $8 $4 $4 18 16 $5 $4 $3 $7 $3 $5 12 21 $6 $2 $3 $4 $3 $6 38 出4 b) Macroeconomic equilibrium occurs at a price-level of and an output level of

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter26: The Neoclassical Perspective

Section: Chapter Questions

Problem 21P: Use Table 26.3 to answer the following questions. Sketch an aggregate supply and aggregate demand...

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Similar questions

Suppose the economy is operating at potential GDP when It experiences an increase in export demand. How might the economy increase production of exports to meet this demand, given that the economy is already at full employment?
Use Table 26.3 to answer the following questions. Sketch an aggregate supply and aggregate demand diagram. What is the equilibrium output and price level? If aggregate demand shifts right, what is equilibrium output? If aggregate demand shifts left, what is equilibrium output? In this scenario, would you suggest using aggregate demand to alter the level of output or to control any inflationary increases in the price level?
Refer to the table below. Real Output Demanded, Billions Price Level Real Output Supplied, Billions $ 506 108 $ 513 508 104 512 510 100 510 512 96 507 514 92 502 Instructions: Enter your anwers as whole numbers. A). What is the equilibrium level of output? What is the equilibrium price level? B). Suppose that aggregate demand increases such that the amount of real output demanded rises by $ 7 billion at each price level. Insert the new values for real output demanded in the table below. Real Output Demanded, Billions New Real Output Demanded, Billions Price Level Real Output Supplied, Billions $ 506 108 $ 513 508 104 512 510 100 510 512 96 507 514 92 502 What is the new equilibrium level of output? What is the new equilibrium price level? By what percentage will the price level increase? Will this inflation be demand-pull inflation or will it be cost-push inflation? C) If potential real GDP ( that is, full-employment GDP) is $ 510…
13 Which of the following would increase aggregate demand? Increase in savings. Increase in taxation. Decrease in consumption spending. Increase in government spending.
9 What are the determinants for aggregate demand and aggregate supply? How would an ideal aggregate demand and aggregate supply graph look like (describe the relationship/provide a graph/provide a link) and explain how each line would shift due to current economic occurrences. What changes could be made to encourage equilibrium
11. Explain why the following statements are false. A.) “The aggregate-demand curve slopes downward because it is the horizontal sum of the demand curves for individual goods.” B.) “The long-run aggregate-supply curve is vertical because economic forces do not affect long-run aggregate supply.” C.) “If firms adjusted their prices every day, then the short-run aggregate-supply curve would be horizontal.” D.) “Whenever the economy enters a recession, its long-run aggregate-supply curve shifts to the left.”
3. What role do imports play in aggregate demand? Under which conditions will changes in imports expand aggregate demand? Reduce aggregate demand?
QUESTION 17 Suppose the aggregate demand and short-run aggregate supply schedules for an economy whose potential output equals $2,700 are given by the table: Aggregate Quantity of Goods and Services Price Level Demanded Supplied 0.50 $3,500 $1,000 0.75 3,000 2,000 1.00 2,500 2,500 1.25 2,000 2,700 1.50 1,500 2,800 What is the size of the recessionary gap?
8) Suppose for reasons unrelated to your income, you decide to spend $1000 (in real terms) more this month than usual: a. The aggregate demand is likely to shift rightward by more than $1000 b. The aggregate demand is likely to shift rightward by $1000 c. GDP is likely to increase by $1000 d. The aggregate demand is likely to shift rightward by less than $1000
1. Suppose that the U.S. government increases its expenditure on highways and bridges by $100 billion. Explain the effect that this expenditure would have on aggregate demand and real GDP.
10-3 Explain why shifts of the aggregate demand curve change the price level in the long run but do not change potential output 5. (Changes in Aggregate Supply) List three factors that can change the economy’s potential output. What is the impact of shifts of the aggregate demand curve on potential output? Illustrate your answers with a diagram.
3. Currently, there is world-wide shortage of computer microchips.Determine the effects on: d. GDP in Canada. e. Short-run aggregate demand and aggregate supply in Canada’s economy.