Exhibit 5-3 -In Exhibit 5-3 AD₁ and AS₁ represent the initial aggregate demand and aggregate supply.The equilibrium price level and real GDP is? A)P₃ and GDP₆ B)P₆ and GDP₅ C)P₄ and GDP₃ D)P₁ and GDP₄ E)P₅ and GDP₂

Question

Quizplus · Accepted Answer

The equilibrium price level and real GDP occur where the initial aggregate demand curve (AD1) intersects the initial aggregate supply curve (AS1), which is at P4 and GDP3.

Exhibit 5-3 -In Exhibit 5-3 AD1 and AS1 Represent the Initial Aggregate

Exhibit 5-3 -In Exhibit 5-3 AD₁ and AS₁ Represent the Initial Aggregate