-Based on the Table Above,
A) What Is the Equilibrium

question 196

Essay

$\begin{array}{|l|l|l|}\hline\begin{array}{l}\text { Price level } \\\text { (GDP defl at or, } \\2005=100)\end{array} & \begin{array}{l}\text { Quantity of real } \\\text { GDP demanded } \\\text { (trillions of } 2005 \\\text { dollars) }\end{array} & \begin{array}{l}\text { Quantity of real } \\\text { GDP supplied } \\\text { (trillions of } 2005 \\\text { dollars) }\end{array} \\\hline 115 & 8.8 & 12.0 \\\hline 110 & 9.4 & 11.0 \\\hline 105 & 10.0 & 10.0 \\\hline 100 & 10.6 & 9.0 \\\hline 95 & 11.2 & 8.0 \\\hline 90 & 11.8 & 7.0 \\\hline\end{array}$
-Based on the table above,
a) What is the equilibrium price level and real GDP?
b) If potential GDP is $11.0 trillion, what does that imply about the economyʹs level of employment?
c) If potential GDP is $9.0 trillion, what does that imply about the economyʹs level of employment?

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Definitions:

Maximum-Output Alternatives

Options within a production process that result in the highest level of output, utilizing resources to their fullest potential.

Specialization

The process by which individuals, firms, or countries concentrate on producing a narrow range of goods or services to gain greater efficiencies and boost economic output.

Brazil

A large South American country with a diverse ecosystem, known for its Amazon rainforest, rich culture, and significant economic influence in Latin America.

Poland

A country located in Central Europe, known for its rich history, cultural heritage, and significant contributions to the arts, science, and politics.