Answer the following questions on the basis of the three sets of data for the co

Question

Answer the following questions on the basis of the three sets of data for the country of North Vaudeville:

a) Which set of data illustrates aggregate supply in the immediate short run in North Vaudeville? The short run? The long run

b) Assuming no chnage in hours of work, if real output per hour of work increases by 10 percent, what will be the new levels of real GDP in the right column of A? Does the new data reflect an increase in aggregate supply or does it indicate a decrease in aggregate supply?

Explanation / Answer

a) Which set of data illustrates aggregate supply in the immediate short run in North Vaudeville? The short run? The long run
A) Price Level - 110 100 95 90 Real GDP - 275 250 225 200 short run

B) Price Level - 100 100 100 100 Real GDP - 200 225 250 275

b. Real GDP 305 275 245 200

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