plot the aggregate demand, Macroeconomics

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The economy of Mainland has the following aggregate and aggregate supply schedules:

                              Real GDP Demanded                        Real GDP Supplied in the Short Run

                                                                                                   ($billion)

Price Level

     90                                  450                                                        350

   100                                  400                                                        400

   110                                  350                                                        450

   120                                  300                                                        500

   130                                  250                                                        550

   140                                  200                                                        550

(a)   Plot the aggregate demand and short run aggregate supply curves.

(b)   Determine Mainland's equilibrium or actual GDP and price level.

(c)   Mainland's long run GDP is $500 billion. Plot the long run aggregate supply curve on the same graph as Part (a) above.

(d)   Is Mainland at or above or below its natural rate of unemployment? Discuss.

(e)   Determine the physical limit of Mainland's economy.


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