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Question 2 In Japan, potential GDP is 500 trillion yen. The following table shows Japan's aggregate demand and short-run aggregate supply schedules. Price level Real GDP Real GDP demanded supplied in the (trillions of yen) short-run (trillions of yen) 80 750 450 90 700 500 100 650 550 110 600 600 120 550 650 130 500 700 140 450 750 a) Draw a graph of the aggregate demand, short-run aggregate supply and long-run aggregate supply curves. b) What are the short-run equilibrium real GDP and price level? c) Does Japan have an inflationary gap or a recessionary gap and what is its magnitude? d) Explain what will happen in the long-run. e) What are the long-run equilibrium real GDP and price level