Suppose you are given the following macroeconomics data (in
million):
Aggregate
Demand:
AD=C+I+G+NX
Short-run Aggregate Supply
(SRAS):
Y=16,000+7,000P
Long-run Aggregate Supply
(LRAS):
YFE=$74,000
Where,
YFE is real GDP at full employment or the
natural rate of unemployment.
P is the aggregate price level.
Consumption
spending:
C=10,000+0.8YD-200P
I =
$4,400
G = $2,000 T =
$2,000
NX = $1,200
1. Find the equation for the AD curve for this
economy.
2. Find the short-run equilibrium level of real GDP
(YSR)...