The following table shows the aggregate demand and aggregate supply schedules for the economy of Queen's Island

Aggregate Quantity demanded:

2000

1800

1600

1400

1200

1000

Price Index

80

90

100

110

120

130

Aggregate Quantity supplied

$1100

1200

1300

1400

1500

1600

1.a) What are the equilibrium values of price and real GDP? (2 marks)

b) Suppose potential GDP is $1,600. What is the type of output gap for Queen's Island (recessionary or inflationary) and what is the value in $$ of that gap? (2 marks)

c) Assume that aggregate demand curve shifts such that economy of Queen's Island is at full employment. How (in which direction) and by how much (in $$$) does the aggregate demand change? What are the new equilibrium values of price and real GDP? (2 marks)

d) Assume that aggregate supply shifts so that economy of Queen's Island is at full employment. How and by how much does the aggregate supply change? What are the new equilibrium values of price and real GDP?(2 marks)