The table below shows aggregate demand and aggregate supply schedules in a hypothetical economy, Avalon. Aggregate Demand and Aggregate Supply Schedules for Avalon Real GDP [ADO) (AD 1) (AS) (AS1) Price Level (2012 = 100) (2012 $ billions 155 140 30 210 175 145 165 1 15 205 165 135 190 140 190 140 125 215 165 165 95 15 240 190 130 30 a. Draw a graph showing Avalon's ADO, AD1, ASo, and AS1. Plot only the endpoints of the two aggregate demand curves and all five points for each of the two aggregate supply curves. 180 Tools 170 160 ADO AD1 150 140 ASO AS1 Price Level (GDP deflator, 2012 = 100) 130 120 110 100 90 80 0 25 50 75 100 125 150 175 200 225 250 Real GDP (2012 $ billion)b. If initially ADo and ASo are the relevant schedules, what are Avalon's equilibrium price level and real output? Equilibrium price level Real output $ billion c. If aggregate demand shifts from ADo to AD, while aggregate supply remains at ASo, what are Avalon's new equilibrium price level and real output? Equilibrium price level falls v to Real output falls to billion Describe this change in aggregate demand. Change in aggregate demand Decrease d. If aggregate supply shifts from ASo to AS, while aggregate demand remains at AD1, what are Avalon's new equilibrium price level and real output? Equilibrium price level rises v to Real output falls to $ billion Describe this change in aggregate supply. Change in aggregate supply |Decrease v Is it a short-run or long-run change? Short-run v