Suppose the aggregate demand (AD) and short-run aggregate supply (AS) schedules for an economy whose potential GDP (LRAS) equals to $2,700 are given by the table.State the short-run equilibrium price level and real GDP.According to the macroeconomic perspectives, is there an inflationary or a recessionary gap? If so, how much is the output gap? Price LevelAggregate Demanded (AD) Aggregate Supplied (AS)50$3,500$1,000753,0002,0002,5002,7002,8001002,5001252,0001501,500

Aggregate demand shows an inverse relationship between price level and real GDP. It slopes downward.…

Answered: Price Level 50 75 Aggregate Demanded…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose the aggregate demand (AD) and short-run aggregate supply (AS) schedules for an economy whose potential GDP (LRAS) equals to $2,700 are given by the table.

State the short-run equilibrium price level and real GDP.
According to the macroeconomic perspectives, is there an inflationary or a recessionary gap? If so, how much is the output gap?

Price Level
Aggregate Demanded (AD) Aggregate Supplied (AS)
50
$3,500
$1,000
75
3,000
2,000
2,500
2,700
2,800
100
2,500
125
2,000
150
1,500

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