The Accompanying Table Shows the Aggregate Demand and Aggregate Supply

question 198

Multiple Choice

$$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Real Domestic Output } \\\text { Demanded (in Billions) }\end{array} & \text { Price Level (Index Value) } & \begin{array} { c } \text { Real Domestic Output } \\\text { Supplied (in Billions) }\end{array} \\\hline \$ 3,000 & 350 & \$ 9,000 \\\hline 4,000 & 300 & 8,000 \\\hline 5,000 & 250 & 7,000 \\\hline 6,000 & 200 & 6,000 \\\hline 7,000 & 150 & 5,000 \\\hline 8,000 & 100 & 4,000 \\\hline\end{array}$$ The accompanying table shows the aggregate demand and aggregate supply schedules for a hypothetical economy. At the price level of 150, there will be a general

• A) surplus in the economy, and output supplied will decrease as the price level falls.
• B) shortage in the economy, and output demanded will decrease as the price level rises.
• C) surplus in the economy, and output supplied will increase as the price level rises.
• D) shortage in the economy, and output demanded will increase as the price level falls.

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Definitions:

Mental Set

A tendency to approach situations in a certain way because that method has worked in the past, potentially limiting problem-solving abilities.

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The degree to which a measurement or calculation reflects the true value or correct result.

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The accuracy and specificity with which an action is performed or a measurement is taken.

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