Table 10-1 In Table 10-1, what is the equilibrium level of real output and the equilibrium price?

Question

Table 10-1  In Table 10-1, what is the equilibrium level of real output and the equilibrium price?

Quizplus · Accepted Answer

The equilibrium level of real output is where AD = SRAS, which occurs at a quantity of 7,500 (in billions of dollars). The equilibrium price is where AD = LRAS, which occurs at a price of 110. Option B is the only choice that has a real output of 7,500 and a price of 110, satisfying both conditions for equilibrium.

Table 10-1 in Table 10-1, What Is the Equilibrium