21 Jul AT WHAT PRICE LEVEL WILL DEMAND FALL BELOW AGGREGATE SUPPLY?
amount of real gdp supplied (in b Show more amount of real GDP demand in billions price level (price index) amount of real gdp supplied (in billions) $180 300 $500 260 250 400 300 200 300 420 150 200 560 100 100 Suppose the consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20 billion fore every 1 percentage point fall in the real interst rate. Also assume that the economys multiplier is 4. if household wealth falls by 5 percent because of declining house values and the real interest rate falls by 2 percentage points in what direction and by how much will the aggregate demand curve initially shift at each price level? In what direction and by how much will it eventually shift? Use the hypothetical economy in the table below to calculate the aggregate demand and supply as well as its price level. Given the above information in this hypothetical economy what is the equilibrium price level and the equilibrium level of real output? Using excel graph both the agrregate demand and aggregate supply curves. Can there be equilibrium level of output at below full employment? At what price level will aggregate supplyl equal aggregate demand? At what price level will demand fall below aggregate supply? Given a price level of 250 will aggregae demand exceed supply? If the aggregate demand schedule shifted by $20 billion to the right at every level what would be the new equilibruim level of income? Show less
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