AS (P100)AS (P125)AS (P73)P$280$250$220125$250$220$190$310$280$250125125100100100757575Suppose the full-employment level of real output (Q) is $250 and the price level (P) isinitially 100. Use the short-run aggregate supply schedules above to answer thefollowing:What will be the level of real output in the short-run if theprice level unexpectedly rises from 100 to 125 because ofan increase in aggregate demand? $Blank 1What will be the level of real output in the short-run if theprice level unexpectedly falls from 100 to 75 because of adecrease in aggregate demand? $Blank 2What will be the level of real output in the long-run whenthe price level rises from 100 to 125? $Blank 3What will be the level of real output in the long-run whenthe price level falls from 100 to 75? $Blank 4

(a) When the price level suddenly rising from 100 to 125 due to an increase in aggregate demand,…

Answered: Suppose the full-employment level of…

Suppose the full-employment level of real output (Q) is $250 and the price level (P) is initially 100. Use the short-run aggregate supply schedules above to answer the following:

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter22: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 9P

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