Equilibrium price level and the equilibrium level

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Using the hypothetical economy data in the table below, calculate the aggregate demand and supply, as well as its price level.

Amount of Real GDP Demanded, Billions

Price Level (Price Index)

Amount of Real GDP Supplied, Billions

$360

600

$1000

520

500

820

600

400

600

840

300

400

1020

100

300

Then address the following:

a) What is the equilibrium price level and the equilibrium level of real output in this hypothetical economy? Use Excel to graph both the aggregate demand and aggregate supply curves. Can there be equilibrium level of output at below full employment?

b) At what price level will aggregate supply equal aggregate demand? At what price level will demand fall below aggregate supply? If given a price level of 300, will aggregate demand exceed supply?

c) If the aggregate demand schedule shifted by $20 billion to the right at every level, what would be the new equilibrium level of income?

Reference no: EM131334812

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