The following table shows the aggregate demand and aggregate supply schedule for a hypothetical economy. Refer to the above table.If the quantity of real domestic output demanded decreased by $500 and the quantity of real domestic output supplied increased by $500 at each price level, the new equilibrium price level and quantity of real domestic output would be:
A)150 and $1500.
B)150 and $2000.
C)200 and $2000.
D)250 and $2000.

Question

The following table shows the aggregate demand and aggregate supply schedule for a hypothetical economy.  Refer to the above table.If the quantity of real domestic output demanded decreased by $500 and the quantity of real domestic output supplied increased by $500 at each price level, the new equilibrium price level and quantity of real domestic output would be:
A)150 and $1500. 
B)150 and $2000. 
C)200 and $2000. 
D)250 and $2000.

Quizplus · Accepted Answer

If the quantity of real domestic output demanded decreased by $500, then at a price level of 150, the quantity of real domestic output demanded would be 1500 (3000-500). If the quantity of real domestic output supplied increased by $500, then at a price level of 150, the quantity of real domestic output supplied would also be 1500 (1000+500). Therefore, the equilibrium price level would remain at 150, but the new equilibrium quantity of real domestic output would be 2000 (1500+500).

The Following Table Shows the Aggregate Demand and Aggregate Supply