Topic: Aggregate Demand and Aggregate Supply Learning Activity #3 Suppose the aggregate demand and short-run aggregate supply schedules for an economy whose potential output equals $2,100 are given by the table. Price Level AD1 AD2 SRAS 0.60 3000 1000 0.70 2750 1250 0.80 2500 1500 0.90 2250 1750 1.00 2000 2000 1.10 1750 2250 1.20 1500 2500 1. Draw the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves. 2. Find the short-run equilibrium real GDP and the price level. 3. Characterize the current economic situation. Is there an inflationary or a recessionary gap? If so, how large is it? 4. Now suppose aggregate demand increases by $500 at each price level; for example, the aggregate demand at a price level of 0.60 now equals $3,500. Draw the new aggregate demand curve (AD2), find the new short-run equilibrium price level and real GDP, and state whether there is an inflationary or a recessionary gap and give its size.Price 0.70 0.60 1000 1250 1500 1750 2000 2250 2500 2750 3000 Quantity