Real GDP Price Level Real GDP

Demanded (Price Index) Supplied

$100 300 $400

$200 250 $400

$300 200 $300

$400 150 $200

$500 150 $100

1.Use the above table to answer the following questions. (All Real GDP figures are in billions of $.)

What are the equilibrium price level and real output? __________________________

Is this equilibrium real output the full-capacity real output?Explain. _____________

_____________________________________________________________________

Suppose that buyers desire to purchase $200 of extra real output at each price level.Draw the new aggregate demand curve, AD₁.

What are the new equilibrium price level and real output? ______________________

Over which range of aggregate supply has equilibrium changed?