The economy of mainland has the following aggregate and, Ask an Expert

Economics

The economy of Mainland has the following aggregate and aggregate supply schedules:

Real GDP Demanded Real GDP Supplied in the Short Run

($billion)

Price Level

90 450 350

100 400 400

110 350 450

120 300 500

130 250 550

140 200 550

(a) Plot the aggregate demand and short run aggregate supply curves.

(b) Determine Mainland's equilibrium or actual GDP and price level.

(c) Mainland's long run GDP is $500 billion. Plot the long run aggregate supply curve on the same graph as Part (a) above.

(d) Is Mainland at or above or below its natural rate of unemployment? Discuss.

(e) Determine the physical limit of Mainland's economy.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9527895

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