Question: The table sets out the aggregate demand and aggregate supply schedules in Japan. Potential GDP is 600 trillion yen. What is the short-run macroeconomic equilibrium?

The table sets out the aggregate demand and aggregate supply schedules in Japan. Potential GDP is 600 trillion yen. What is the short-run macroeconomic equilibrium? Does Japan have an inflationary gap or a recessionary gap and what is its magnitude?

Price level (GDP price index) Real GDP Real GDP supplied (trillions of 2005 yen) demanded 600 75 400 85 550 450 95 500 5

Price level (GDP price index) Real GDP Real GDP supplied (trillions of 2005 yen) demanded 600 75 400 85 550 450 95 500 500 105 450 550 115 400 600 125 350 650 135 300 700

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