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:

Chemical Communication

The use of chemical signals between organisms, which can regulate behavior, identify individuals or species, and signal threats or resources.

Visual Signals

Information conveyed through visible signs or gestures, often essential for communication in animals, including humans.

Auditory Signals

Sounds that are detected by the ear and interpreted by the brain, important for communication and environmental awareness.

Natural Selection

The process by which biological traits become either more or less common in a population as a function of the effect of inherited traits on the differential reproductive success of organisms interacting with their environment.