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Read the article 'Plummeting oil prices and the effects on consumers': This is the website( copy and paste to the new tab) : http://www.usnews.
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Question

# 1. Read the article "Plummeting oil prices and the effects on consumers":

This is the website( copy and paste to the new tab) : http://www.usnews.com/news/articles/2015/01/13/cheap-oil-good-news-for-consumers-mixed-bag-for-us-industry

In your opinion, how does the decline in the price of oil relate to what we have learned in Chapter 13, Aggregate Supply-Aggregate Supply? What is the effect of the decrease in the price of oil on the price level and real GDP in the AS-AD model?

Real GDP, Y Consumption expenditure, C Investment, I

(trillions of 2009 dollars) (trillions of 2009 dollars) (trillions of 2009 dollars)

0.0 0.00 1.75

2.5 1.50 1.75

5.0 3.00 1.75

7.5 4.50 1.75

10.0 6.00 1,75

Government Exports, X Imports, M

Expenditure, G (trillions of (trillions of 2009 dollars)

(trillions of 2009 dollars) 2009 dollars)

1.25 1.50 0.00

1.25 1.50 0.50

1.25 1.50 1.00

1.25 1.50 1.50

1.25 1.50 2.00

2. Based on the table above

a. What is the aggregate planned expenditure at each level of real GDP?

b. At what level of real GDP is equilibrium expenditure achieved?

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