Macroeconomics
21st Edition
ISBN: 9781259915673
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 12.7, Problem 4QQ
To determine
Bringing equilibrium in the economy.
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Students have asked these similar questions
Which of the following is not a reason for the downward slope of the aggregate demand curve?
As the price level decreases, the quantity demanded of real GDP increases.
O As the price level decreases, American products are more attractive than imports, so their aggregate quantity
increases.
O As the price level decreases, the purchasing power of dollar decreases, so aggregate demand increases.
O As the price level decreases, interest rates decrease, so consumption increases.
Refer to the table below.
Real Output Demanded, Billions
Price Level
Real Output Supplied, Billions
$ 506
108
$ 513
508
104
512
510
100
510
512
96
507
514
92
502
Instructions: Enter your anwers as whole numbers.
A). What is the equilibrium level of output? What is the equilibrium price level?
B). Suppose that aggregate demand increases such that the amount of real output demanded rises by $ 7 billion at each price level. Insert the new values for real output demanded in the table below.
Real Output Demanded, Billions
New Real Output Demanded, Billions
Price Level
Real Output Supplied, Billions
$ 506
108
$ 513
508
104
512
510
100
510
512
96
507
514
92
502
What is the new equilibrium level of output?
What is the new equilibrium price level?
By what percentage will the price level increase?
Will this inflation be demand-pull inflation or will it be cost-push inflation?
C) If potential real GDP ( that is, full-employment GDP) is $ 510…
Real GDP
Price Level Real GDP
Demanded (Price Index) Supplied
100
300
400
$
200
250
400
$
300
200
300
$
400
150
200
$
500
150
S
100
Using the above table (all Real GDP values are in billions of
dollars), what are the:
Equilibrium Price Level: Blank 1
Equilibrium Real Output: $Blank 2billion (do NOT enter
the '$' nor 'billion' in your response)
Suppose that buyers desire to purchase $200 billion of
extra real output at each price level, what are the new:
Equilibrium Price Level: Blank 3
Equilibrium Real Output: $Blank 4billion
Chapter 12 Solutions
Macroeconomics
Ch. 12.7 - Prob. 1QQCh. 12.7 - Prob. 2QQCh. 12.7 - Prob. 3QQCh. 12.7 - Prob. 4QQCh. 12.A - Prob. 1ADQCh. 12.A - Prob. 2ADQCh. 12.A - Prob. 1ARQCh. 12.A - Prob. 2ARQCh. 12.A - Prob. 1APCh. 12.A - Prob. 2AP
Ch. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Prob. 4RQCh. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 1PCh. 12 - Prob. 2PCh. 12 - Prob. 3PCh. 12 - Prob. 4PCh. 12 - Prob. 5P
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