8/17/2019 Chapter 10 Macro

http://slidepdf.com/reader/full/chapter-10-macro 1/5

PrAsEnRaJ RCEA150

Aggregate Supply and Aggregate Demand

Chapter 10

8/17/2019 Chapter 10 Macro

http://slidepdf.com/reader/full/chapter-10-macro 2/5

PROBLEMS 14 & 15

PRICE LEVEL

REAL GDP

DEMANDED(billions of

2005doll !s"

REAL GDPS#PPLIED IN

$%E S%OR$R#N

(billions of2005

doll !s"

PO$EN$IALGDP

100 1150 1050 1050

110 1100 1100 1050

120 1050 1150 1050

130 100 1200 1050

140 950 1250 1050

150 900 1300 1050

160 50 1350 1050

8/17/2019 Chapter 10 Macro

http://slidepdf.com/reader/full/chapter-10-macro 3/5

1100

110

REA! "DP#$%ll%&ns &'2005 d&llars(

Pr%)e le*el

0

E+u%l%$r%umAD,AS

AD AS

8/17/2019 Chapter 10 Macro

http://slidepdf.com/reader/full/chapter-10-macro 4/5

14- .hat %s the sh&rt run e+u%l%$r%um real "DP and pr%)e le*el/

Sh&rt run e+u%l%$r%um real "DP %s 1100

%ll%&ns at 2005 d&llars at pr%)e le*el %s 110

8/17/2019 Chapter 10 Macro

http://slidepdf.com/reader/full/chapter-10-macro 5/5

ES- he )&untry ha*e an %n at%&nary gap- h%s %s$e)ause the real "DP h%)h %s 1100 %s e )eeds thep&tent%al "DP h%)h %s 1050-

he am&unt $y h%)h the real "DP e )eeds p&tent%al"DP %s )alled %n at%&nary gap-

15- D&es the )&untry ha*e an %n at%&nary gap &r a re)ess%&narygap and hat %s %ts magn%tude/

he agn%tude &' %n at%&nary gap, real "DP 7p&tent%al "DP

, 1100 7 1050, 50 $%ll%&ns &' 2005 d&llars