Aggregate demand curve and an aggregate supply curve

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Question

The following schedule provides information with which to draw both an aggregate demand curve and an aggregate supply curve. Both curves are assumed to be straight lines. Average Price($ per unit): $1,000,100

Quantity Demanded(units per year): 0, 900

Quantity Supplied(units per year):1,000, 100

(a) At what price level does equilibrium occur?

(b) What curve would have shifted if a new equilibrium were to occur at an output level of 700 and a price level of $700?

(c) What curve would have shifted if a new equilibrium were to occur at an output level of 700 and a price level of $500?

(d) What curve would have shifted if a new equilibrium were to occur at an output level of 700 and a price level of $300?

Please provide step by step explanation for each answer

Reference no: EM132339313

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