In the Table Below Are Aggregate Demand and Aggregate Supply

question 162

Essay

In the table below are aggregate demand and aggregate supply schedules.

(a)Suppose in Year 1,aggregate demand is shown in columns (1)and (2)in the above table and short-run aggregate supply is shown in columns (1)and (4)in the above table.What will be the equilibrium level of real GDP and the equilibrium price level?
(b)Suppose in Year 2,aggregate demand changes and is now shown in columns (1)and (3).What will be the new equilibrium level of real GDP and the new equilibrium price level?
(c)Suppose in Year 3,aggregate demand changes and is now shown again in columns (1)and (2).What will be the new level of real GDP and the new price level if prices and wages are completely flexible downward?
(d)Suppose in Year 3,aggregate demand changes and is now shown again in columns (1)and (2).What will be the new level of real GDP and the new price level if prices and wages are completely inflexible downward?

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Definitions:

Parabronchi

Tubular structures within the lungs of birds through which air flows, allowing for efficient gas exchange during both inhalation and exhalation.

Anterior Air Sacs

Air-filled structures part of the avian respiratory system, located near the front of the bird's body, involved in the storage and movement of air through the lungs.

Spiracles

Openings on the body of some animals, such as insects and some fishes, for breathing.

Fick's Law

A principle in physics and chemistry describing the rate of diffusion of a substance across a space, influenced by the concentration gradient, surface area, and other factors.