Question: Use the following information to draw aggregate demand (AD) and aggregate supply (AS) curves on the following graph. Both curves are assumed to be straight

Use the following information to draw aggregate demand (AD) and aggregate supply (AS) curves on the following graph. Both curves are assumed to be straight lines.

Price Level 800 100 Output Demanded Output Supplied $800 $700 100

(a) At what rate of real output does equilibrium occur?

(b) What curve (AD or AS) would have shifted if a new equilibrium were to occur at an output level of 600 and a price level of $600?

Price Level 800 100 Output Demanded Output Supplied $800 $700 100

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