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Q1. The following table shows the aggregate demand and short-run and long-run aggregate supply schedules for Japan. Real GDP suppliedin Real GDP supplied in Real GDP demanded Bricsieve the short-run the long-run (trillions of 2005 yen) . i (trillions of 2005 yen) ~(trillions of 2005 yen) 75 600 400 600 85 550 450 600 95 500 500 600 105 450 550 600 115 400 600 600 125 350 650 600 135 300 700 600 1. What is the short-run equilibrium real GDP and price level? 2. What is the long-run equilibrium or real GDP and price level? 3. Does Japan have an inflationary gap or recessionary gap? How much? 4. Explain how the economy will adjust to restore the long-run equilibrium? Q2. Consider the information provided in the following graph for the Saskland econorny. 00) LAS 2 140 0 @ 3 Price level (GDP deflator, 1997 B S 110 100 [In the long run, % money wage adjusts AD 0 900 950 1,000 1,050 1,100 1,150 Real GDP (billions of 1997 dollars) 1. What are the equilibrium levels of GDP and price in the short-run? 2. What are the equilibrium levels of GDP and price in the long-run? 3. Suppose all firms expect to earn higher profit next year. What would happen to GDP and Price in the short-run? Show it on the graph. 4. Following (3), will there be an inflationary gap o recessionary gap in the short-run? 5. Following (3), how will the economy return to its long-run equilibrium? Show on the graph? 6. How will the value of the following variables change compared with their original values in (2) in the long run (higher, lower, unchanged)? 1. Price level 2. Real GDP 3. Nominal Wage 4. Real Wage Note: You two options for submission: 1) Upload your fle (including a word or a picture of your handuwritten file, and 2) use the answer box to write your answers and insert your graphs using the menu at the top of the box. You'll need to save your graphs as picture (jpeg format) on your computer and then insert it into the answer box