6. Use the following table to answer the questions below.

Aggregate Price Level Output (SRAS) Output (Aggregate Demand)

150 1,000 200

125 800 400

100 600 600

75 400 800

50 200 1,000

a. Graph the aggregate demand (AD) and the short-run aggregate supply (SRAS) curves. Label them AD1 and SRAS1. What are the aggregate output (Y) and the aggregate price level?

b. Assume aggregate demand grows by 200 at each price level. Graph the new AD and label AD2. What are the new aggregate output (Y) and the aggregate price level?

c. If full-employment output is 600, is the economy experiencing recessionary or inflationary pressures?

d. If the economy experiences "self-correction", how much would the SRAS curve need to shift in order for the economy to return to full-employment output at 600? What would be the new equilibrium aggregate price level.