00:01
The question has three parts.
00:03
For the first part, we need a diagram which we can use to answer all the rest of the questions.
00:09
We are given a table and i have used the table to form the following dots.
00:14
For my ad curve, i'm using the color red, which is the aggregate demand curve.
00:19
Joining the dots for the red ad curve, i get this as my hypothetical aggregate demand curve.
00:28
To get my hypothetical aggregate supply curve, i join my blue.
00:31
Dots which are representative of my as curve.
00:35
Now that we have drawn our hypothetical curves, we can see that they intersect at this point where our price level is 200 and our real domestic output is $300 billion.
00:46
So for part a, we can see that the equilibrium price level is 200 and equilibrium real output is $300 billion.
00:56
The equilibrium real output is not necessarily the full employment real output.
01:02
This is because the full capacity level of gdp is where the as curve becomes vertical, which is something that we cannot determine from the diagram since the values are not provided...