Suppose the potential level of real GDP for a hypothetical economy is $160 and the price level (P) initially is 200.Use the following short-run aggregate supply schedules to answer the questions. 
(a) What will be the short-run level of real GDP if the price level rises unexpectedly from 200 to 210 because of an increase in aggregate demand? Falls unexpectedly from 200 to 190 because of a decrease in aggregate demand? Explain each situation.(b) What will be the long-run level of real GDP when the price level rises from 200 to 210? Falls from 200 to 190? Explain each situation.
Definitions:
Business Depiction
The representation or portrayal of business practices, environments, or scenarios in various forms of media and literature.
Robert and Helen Lynd
Sociologists known for their groundbreaking study of American society in "Middletown," analyzing the impacts of modernization on a small town.
Laissez-Faire
An economic policy or attitude that advocates minimal governmental intervention in the free market.
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