Consider a closed economy that can be described by the AD-AS model. In addition, prices can adjust to a change in aggregate demand or aggregate supply. Planned aggregate expenditure: AEPIanned = 1000 2P + 0.8Y Short-run aggregate supply (SRAS): P = (100 + O.1Y)(W/150), where W = wage Part (a) Find the long-run equilibrium price and wage if the long-run production capacity is 4000. Part (b) Recently there is a supply side shock such that the new SRAS equation becomes P = (115 + O.1Y)(W/150) 0 To which direction the SRAS has shifted? 0 Find the short-run equilibrium levels of output and aggregate price. 0 What will be the wage when the economy reaches its new long-run equilibrium? Answers: 0 For numerical answers, just enter the numbers (i.e., no unit of measurement, no comma). o For example, if prot= $5,125.6, just enter "5125.6" in the answer box 0 Mm between the negative sign and the number. 0 DO NOT enter " $51256" or " 5,125.6" or "prot = 5,125.6", etc. The system will mark you wrong & you won't receive marks. Part (a) Long-run equilibrium level of price = (Keep your answer to nearest integer) Long-run equilibrium level of wage = (Keep your answer to nearest integer) Part (b) The SRAS curve has shifted horizontally to the (left or right). The short-run equilibrium level of output = (Keep your answer to 1 decimal place if needed) The short-run equilibrium level of price = (Keep your answer to 1 decimal place if needed) The long-run equilibrium level of wage = (Keep your answer to 2 decimal places if needed)