It shows the aggregate demand and aggregate supply schedule for a hypothetical economy. Refer to the table above. If the quantity of real domestic output demanded increased by $1000 at each price level, the new equilibrium price level and quantity of real domestic output would be:
A) 150 and $2500
B) 250 and $2500
C) 200 and $2000
D) 300 and $3000

Question

It shows the aggregate demand and aggregate supply schedule for a hypothetical economy.  Refer to the table above. If the quantity of real domestic output demanded increased by $1000 at each price level, the new equilibrium price level and quantity of real domestic output would be:
A) 150 and $2500 
B) 250 and $2500 
C) 200 and $2000 
D) 300 and $3000

Quizplus · Accepted Answer

If the quantity of real domestic output demanded increased by $1000 at each price level, the aggregate demand curve would shift rightward. This would result in a higher equilibrium price level and quantity of output. Based on the chart, the previous equilibrium was at a price level of 200 and a quantity of $1500. With a $1000 increase in real domestic output demanded, the new equilibrium would be at a price level of 250 and a quantity of $2500, which is shown at the intersection of the new aggregate demand and aggregate supply curves. Thus, the correct answer is B.

It Shows the Aggregate Demand and Aggregate Supply Schedule for a Hypothetical