The demand side is represented by the aggregate

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Unformatted text preview: too; any economy has a demand side and a supply side, as illustrated in Exhibit 11-10. The demand side is represented by the aggregate demand curve, which shows the quantity of goods and services that buyers are willing and able to buy at different price levels. (Sometimes the quantity of goods and services is simply referred 304 Chapter 11 Measuring Economic Performance power. Kennedy earned the equivalent of $648,667 in today’s (2005) dollars, and the president today earns $400,000. In other words, Kennedy was paid the equivalent of $248,667 more than the president today is paid. Suppose a house cost $45,000 in 1970, and the CPI in 1970 was 37.8. What is the price of the house in 2005 dollars (CPI in 2005 = 194.6)? THINK ABOUT IT to as output or as real GDP.) The supply side is represented by the aggregate supply curve, which shows the quantity of goods and services, or output, that producers are willing and able to supply at different price levels. The equilibrium price level and equilibrium quantity of goo...
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