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What is an equilibrium price and quantity

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Reference no: EM13833288

Price Level AD AS

110 700 600

120 690 640

130 680 680

140 670 720

150 660 740

160 650 760

170 640 770

1) What is an equilibrium price and quantity?

2) Imagine that as a result of a government tax cut, aggregate demand becomes higher by 50 at every price level. Identify the new equilibrium.

3) How will the new equilibrium alter output? How will it alter the price level? What do you think will happen to employment?

Reference no: EM13833288

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