Economics Questions:

4. Answer the following questions, using the aggregate demand and aggregate supply schedules for a hypothetical economy. Aggregate Aggregate demanded supplied (in billions) Price level (in billions) $3000 350 $9000 00 50 00 150 100 3 2 2 (a) What will be the equilibrium price level and quantity of real domestic output? (b) If the quantity of aggregate demanded increased by $2000 at each price level, what will be the new equilibrium price level and quantity of real domestic output? (c) Using the original data from the table, if the quantity of real domestic output demanded increased by $5000 and the quantity of real domestic output supplied increased by $1000 at each price level, what would the new equilibrium price level and quantity of real domestic output be? (c) What will happen to equilibrium GDP if exports were $10 billion larger at each level of GDP? Real GDP Aggregate Net Aggregate expenditures = DI expenditures Exports | Imports exports in a private open (billions) in a private (billions) (billions) (billions) economy closed (billions) economy (billions) $ 80 $100 $15 $5 $10 $1 10 120 130 15 5 $10 140 160 160 15 5 $10 170 200 190 15 5 $10 200 240 220 15 5 $10 230 280 250 15 U $10 260 320 280 15 $10 290 360 310 15 5 $10 320 3 (d) What will happen to equilibrium GDP if exports remained at $15 billion, but imports rose to $15 billion? Real GDP Aggregate Net Aggregate expenditures = DI expenditures Exports | Imports exports in a private open (billions) in a private (billions) (billions) (billions) economy closed (billions) economy (billions) $ 80 $100 $15 $5 $10 $1 10 120 130 15 5 $10 140 160 160 15 $10 170 200 190 15 5 $10 200 240 220 15 5 $10 230 280 250 15 $10 260 320 280 15 5 $10 290 360 310 15 5 $10 320