21.
Use Table 13.3 to answer the following questions.
Price Level | Aggregate Supply | Aggregate Demand |
---|---|---|
90 | 3,000 | 3,500 |
95 | 3,000 | 3,000 |
100 | 3,000 | 2,500 |
105 | 3,000 | 2,200 |
110 | 3,000 | 2,100 |
- Sketch an aggregate supply and aggregate demand diagram.
- What is the equilibrium output and price level?
- If aggregate demand shifts right, what is equilibrium output?
- If aggregate demand shifts left, what is equilibrium output?
- In this scenario, would you suggest using aggregate demand to alter the level of output or to control any inflationary increases in the price level?