On the following graph, plot the aggregate demand curve that results from varying the price level from 100 to 120 to 140, holding all else equal.Hint: Real income and the quantity of output are equivalent. For example, a real income of $100 billion is the same as a quantity of output of $100billion.160150Aggregate Demand (AD)14013012011010090100200300400500600700800QUANTITY OF OUTPUT (Billions of dollars)PRICE LE VEL 9. Deriving aggregate demand from the income-expenditure modelThe following graph shows three planned expenditure lines for an economy at three different price levels. PE120 corresponds to the price level of 120;PE100 corresponds to the price level of 100; PE140 corresponds to the price level of 140. The black line (which starts in the bottom left corner) is a45-degree line illustrating the set of points for which real income and planned expenditure are equal.800PE, (P = 100)700PE, (P =120)600PE, (P =140)Slope: 0.5500Y-Intercept: 200400300100100200300400500600700800REAL INCOME (Billions of dollars)The level of equilibrium output at a price level of 100, isOn the following graph, plot the aggregate demand curve that results from varying the price level from 100 to 120 to 140, holding all else equal.Hint: Real income and the quantity of output are equivalent. For example, a real income of $100 billion is the same as a quantity of output of $100billion.PLANNED EXPENDITURES (Billions of dollars)

Demand refers to the willingness and ability of the consumer to purchase goods and services at given…

On the following graph, plot the aggregate demand curve that results from varying the price level from 100 to 120 to 140, holding all else equal. Hint: Real income and the quantity of output are equivalent. For example, a real income of $100 billion is the same as a quantity of output of $100 billion. 180 150 Aggregate Demand (AD) 140 130 120 110 100 90 100 200 300 400 500 600 700 800 QUANTITY OF OUTPUT (Billions of dollars) PRICE LE VEL

On the following graph, plot the aggregate demand curve that results from varying the price level from 100 to 120 to 140, holding all else equal. Hint: Real income and the quantity of output are equivalent. For example, a real income of $100 billion is the same as a quantity of output of $100 billion. 180 150 Aggregate Demand (AD) 140 130 120 110 100 90 100 200 300 400 500 600 700 800 QUANTITY OF OUTPUT (Billions of dollars) PRICE LE VEL

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 6.13P

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