Suppose that the equation for the aggregate demand is Y = 7,000 + 2,400/P. In this real
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(a) Calculate the points on the aggregate demand curve when the price level equals 0.75, 0.80, 1.00, 1.20, 1.25, and 1.50.
(b) Compute the price level and real GDP in periods 1€“6. Describe the cyclical behavior of real GDP and the price level in this real business cycle model.
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