questions a) is included in the question b)Find the full employment real GDPaggregate quantity supplied AQS, and nominal wage for each of the following price levels P=1,2,3, . Does the equilibrium levels of employment and AQS change as the price level changes? is the long run aggregate supply curve downward or upward sloping or is it a vertical line? Suppose that the velocity o money is constant overline V =5 and the money supply is M ^ 3 = 80 .c) For each one of the following levels P = 1, 2, 3, 4 and 5find the aggregate quantity demanded AQD according to the quantity theory. Plot for yourself the corresponding aggregate demand curve on the same diagram as the long run aggregate supply curve. You need to submit the schedule of the Aggregate demand curveWhat is the equilibrium price level, the equilibrium rea GDP, equilibrium aggregate quantity AQS and the equilibrium aggregate quantity demanded? What is the equilibrium nominal wage ? Suppose now that overline V =5 does not change but the money supply decreases to M ^ s = 60 . d) What is the new equilibrium price, and the new equilibrium real GDP? What is the new equilibrium nominal wage? What happened to the equilibrium price level P and the equilibrium nominal wage? e) Comparing your answers to c) and d) what happened to the equilibrium real GDP, and employment ? f) Are your answers to the previous two questions consistent with the observed data on the money supply, the price level, nominal wages real GDP and unemployment during the 929 - 1933 depression ? (Use the relevant diagrams in chapter 20 to justify your answers )

l1 01AM Tue Mar 30 3 3CD!\" acadlau CS Units of Opportunity cost of a worker Real value of Output per additional labor in terms of units output = worker real wage required by an Maximum real wage a producer is additional worker willing to pay for an additional worker (1) (2) (3) 8 1 9 10 2 8 12 3 7 16 4 6 18 5 5 20 6 4 22 7 3 a) Carefully draw for yourself the demand and supply curves of labor on a diagram and nd the equilibrium real wage and the equilibrium level of employment. No Need to submit the diagram. To each level of employment corresponds a level of real GDP given in the following table. Production Function Schedule Level of Aggregate Employment quantity supplied = real GDP 2 4 6 8 o _ 100 b) Find the full employment real GDP, aggregate quantity supplied A08, and nominal wage for each of the following price levels P = 1, 2 ,3, 4. Does the equilibrium levels of employment and AQS change as the price level changes