Question 2 Price Level 20,35,50,85,110,135 Real GDP demanded(in billions) 100, 75,55,25,15,10 Real GDP supplied ( in billions) 20,40,55,85,105,120...

Question 2

Price Level 20,35,50,85,110,135

Real GDP demanded(in billions) 100, 75,55,25,15,10

Real GDP supplied ( in billions) 20,40,55,85,105,120

         1)      i. Using the information provided, plot and draw the Aggregate Demand and Aggregate Supply curves by hand. Insert your drawing below.                    

             ii.        Identify and show the macroeconomic equilibrium on your drawing from part i.                                                                                                                      

            iii.        Assume potential GDP is at $63 Billion. Illustrate the potential GDP on your drawing from part i. Is there an inflationary or recessionary gap? Explain why.