4. AS-AD model: In Japan, potential GDP is 400 billion yen. The table shows the aggregate demand and short-run aggregate supply schedules. Price level Real GDP demanded (billions of 2007 yen) Real GDP supplied in the short run (billions of 2007 yen) 75 600 400 85 550 450 95 500 500 105 450 550 115 400 600 125 350 650 135 300 700 a. What is Japan's short-run equilibrium real GDP and price level? b. Does Japan have an inflationary gap or a recessionary gap and what is the size of the gap? Show it on an AS-AD diagram. c. Assuming there is no government intervention, explain how Japan's economy will shift from short-run equilibrium to the long-run equilibrium. Show it in your AS-AD diagram. d. What is the long-run equilibrium real GDP and price level? Label it in your AS-AD diagram.