Answer Happy

The table below shows the initial aggregate demand, short-run, and long-run aggregate supply schedules Price level Aggregate demand Aggregate Supply (billion Long run Aggregate supply (billion $) $) (billion $) 80 1600 400 1200 90 1400 600 1200 100 1200 800 1200 110 1000 1000 1200 120 800 1200 1200 130 600 1400 1200 140 400 1600 1200 1. Draw the AD, SAS, and LAS curves, show the equilibrium level of real GDP and price level. (1 Mark) 2. What is the value of Potential GDP? (1 Mark) 3. What is the value of short run macroeconomics equilibrium GDP? (1 Mark) 4. What is the value of short run macroeconomics equilibrium price level? (1 Mark) 5. Is the country producing above, below or at full employment? (1 Mark) 6. What is the name of the gap if any? (1 Mark) 7. What is the size of the gap? (1 Mark) 8. Is there positive or negative cyclical unemployment? (1 Mark) 9. Do you have to Increase or decrease GDP? (1 Mark) 10. Should the country implement expansionary or contractionary policy? (1 Mark)