Problem Set 6

Problem Set 6 - THIRD EDITION ECONOMICS and MACROECONOM ICS...

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Problem Set 6
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An increase in the price level may be caused (a) by eithe r an incre ase in aggr egat e dem and or an incre ase in aggr egat e supp ly. (b) only by an incre ase in aggr egat e supp ly. (c) by eithe r an incre ase in aggr egat e
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The graph above shows the aggregate demand and aggregate supply curves prevailing for the economy in a given year, along with potential real GDP for that year. Given the level of aggregate demand, (a) ther e woul d be una ntici pate d depl etion of inve ntor y if pote ntial real GDP were achi eved .
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and services. The aggregate quantity demanded by buyers during the same year is $4.5 trillion worth of goods and services. It follows that (a) the econ omy is in mac roec ono mic equil ibriu m at the curr ent price level . (b) the price level is likel y to incre ase. (c)
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This note was uploaded on 03/20/2008 for the course EC 205 taught by Professor Hymen during the Spring '08 term at N.C. State.

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Problem Set 6 - THIRD EDITION ECONOMICS and MACROECONOM ICS...

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