Answer the question on the basis of the following aggregate demand and supply sc

Question

Answer the question on the basis of the following aggregate demand and supply schedules for a hypothetical economy Amount of Real Price Level Output Demanded (index Value) Amount of Real $200 300 400 500 600 300 250 200 150 100 Output Supplied. $500 450 400 300 200 7. Refer to the above data. The equilibrium price level will be: (1 points) 8. Refer to the above data. If the price level is 250 and producers supply $450 of real output: would there be surplus or shortage of real output? If so by how much?(3 points) (Show your calculations) 9. How can demand-pull inflation be represented on a graph? (DRAW THE GRAPH 2 points) 10. Graphically, show cost-push inflation.(DRAW THE GRAPH

Explanation / Answer

Q 7-8 are answered below

7.

Equilibrium occurs at the point Demand equals Supply

This occurs at P = $200 and Q = 400 units

8.

At P = 250,

Qs = 450 while Qd = 300

Since Qs > Qd, there will be surplus

Surplus = Qs - Qd = 450 - 300 = 150 units

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