Suppose that aggregate demand increases such that the amount of real output demanded rises by $7 billion at each price level.

• By what percentage will the price level increase? (what %)
• If potential real GDP (that is, full-employment GDP) is $510 billion, what will be the size of the positive GDP gap after the change in aggregate demand? (How Much) Billion?

Real Output Demanded, Real Output Original, Supplied, Billions Price Level Billions 506 116 $ 513 508 108 512 510 190 510 512 92 507 514 84 502