Answer Happy

8. Critical analysis Q12 Consider an economy with the following aggregate demand (AD) and aggregate supply (AS) schedules. These schedules reflect the fact that, prior to the period we're examining, decision makers entered into contracts and made choices anticipating that the price level would be P105- AD106 (Trillions of Dollars) Price level 5.1 95 4.9 100 4.7 105 4.5 110 115 4.3 SRAS 105 (Trillions of Dollars) 3.5 3.8 4.2 4.5 4.8 The quantity of GDP that will be produced will be $ trillion and the price level that will emerge during this period will be How will the unemployment rate during the current period compare with this economy's natural rate of unemployment? O Unemployment will be equal the natural rate. O Unemployment will be above the natural rate. O Unemployment will be below the natural rate. What will happen to the equilibrium rate of output? Output will exceed the natural level at a higher price level Output will fall short of the natural level at a higher price level. Output will return to the natural level at a lower price level. O Output will return to the natural level at a higher price level. Will the rate of GDP produced during this period be sustainable into the future? Real GDP will remain at $4.5 trillion. O Real GDP is not sustainable at $4.5 trillion; it will tend to fall. Real GDP is not sustainable at $4.5 trillion; it will tend to rise.