Assume that the potential GDP in the economy of Panem is $750 (billion) and that the...
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Assume that the potential GDP in the economy of Panem is $750 (billion) and that the aggregate demand and aggregate supply are as shown below (also in billions): Aggregate Quantity Demanded 830 810 790 770 750 730 710 690 Aggregate Quantity Demanded 830 810 790 770 750 730 710 690 Price Index 106 107 108 109 110 111 112 113 Price Index 106 107 108 109 110 111 112 113 Aggregate Quantity Supplled 640 650 670 700 750 790 840 900 Aggregate Quantity Supplied 640 650 670 700 750 790 840 900 a) i. What is the value of equilibrium GDP and the price level? ii. What type of macroeconomic equilibrium exists? (2) b) Suppose that a serious firestorm hits parts of the country reducing its aggregate supply by $130 at all price levels. What will be the new values of equilibrium GDP and the price level? (2) Assume that the potential GDP in the economy of Panem is $750 (billion) and that the aggregate demand and aggregate supply are as shown below (also in billions): Aggregate Quantity Demanded 830 810 790 770 750 730 710 690 Aggregate Quantity Demanded 830 810 790 770 750 730 710 690 Price Index 106 107 108 109 110 111 112 113 Price Index 106 107 108 109 110 111 112 113 Aggregate Quantity Supplled 640 650 670 700 750 790 840 900 Aggregate Quantity Supplied 640 650 670 700 750 790 840 900 a) i. What is the value of equilibrium GDP and the price level? ii. What type of macroeconomic equilibrium exists? (2) b) Suppose that a serious firestorm hits parts of the country reducing its aggregate supply by $130 at all price levels. What will be the new values of equilibrium GDP and the price level? (2)
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Related Book For
Macroeconomics Principles, Applications, and Tools
ISBN: 978-0132555234
7th Edition
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
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