Use the Figure Below to Answer the Following Questions

question 69

Multiple Choice

Use the figure below to answer the following questions.
Figure 12.2.3
-Refer to Figure 12.2.3.Assume that the figure illustrates an economy initially in equilibrium at the intersection of the SAS₀ curve and the AD₀ curve.If the aggregate demand curve is expected to shift to AD₁ but remains at AD₀, the new equilibrium real GDP is _______ and the new equilibrium price level is _______.

• A)$500 billion; 100
• B)$380 billion; 100
• C)$500 billion; 150
• D)$620 billion; 125
• E)$380 billion; 125

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Definitions:

Quantities

The amount or number of a material or immaterial good considered as a unit or in discrete portions.

Industrialized Countries

Nations with significant industrial activity, high levels of income per capita, and widespread infrastructure.

Paasche Index

Amount of money at current-year prices that an individual requires to purchase a current bundle of goods and services divided by the cost of purchasing the same bundle in a base year.

Nominal Income

The amount of money received in a specified period before adjusting for inflation.