2. Answer the following questions on the basis of the following three sets of data for the country of North Vaudeville: LO32.4

(A) (B) (C)

Price Level Real GDP Price Level Real GDP Price Level Real GDP 110 100 95 90 275 250 225 200 100 100 100 100 200 225 250 275 110 100 95 90 225 225 225 225

a. Which set of data illustrates aggregate supply in the immediate short run in North Vaudeville? The short run?

The long run?

b. Assuming no change in hours of work, if real output per hour of work increases by 10 percent, what will be the new levels of real GDP in the right column of A? Do the new data reflect an increase in aggregate supply or do they indicate a decrease in aggregate supply?