$$\begin{array} { c c c }
\hline \begin{array} { c }
\text { Aggregate demand } \
\text { (quantity demanded, } \
\text { in billions of dollars) }
\end{array} & \text { Price level } & \begin{array} { c }
\text { Aggregate supply } \
\text { (quantity supplied, } \
\text { in billions of dollars) }
\end{array} \
\hline \$ 100 & 150 & \$ 1,200 \
200 & 125 & 1,000 \
400 & 100 & 800 \
600 & 75 & 600 \
800 & 50 & 400 \
1,000 & 25 & 200 \
\hline
\end{array}$$
-Refer to the aggregate demand and aggregate supply schedules in the exhibit.What is the equilibrium level of output?

A) 200
B) 400
C) 600
D) 800

Question

$$\begin{array} { c c c } 
\hline \begin{array} { c } 
\text { Aggregate demand } \
\text { (quantity demanded, } \
\text { in billions of dollars) }
\end{array} & \text { Price level } & \begin{array} { c } 
\text { Aggregate supply } \
\text { (quantity supplied, } \
\text { in billions of dollars) }
\end{array} \
\hline \$ 100 & 150 & \$ 1,200 \
200 & 125 & 1,000 \
400 & 100 & 800 \
600 & 75 & 600 \
800 & 50 & 400 \
1,000 & 25 & 200 \
\hline
\end{array}$$
-Refer to the aggregate demand and aggregate supply schedules in the exhibit.What is the equilibrium level of output?
 
A) 200 
B) 400 
C) 600 
D) 800

Quizplus · Accepted Answer

The equilibrium level of output occurs where aggregate demand equals aggregate supply. At a price level of 100, the quantity of output demanded is 400 billion dollars while the quantity of output supplied is 800 billion dollars. As the price level falls, the quantity of output demanded increases while the quantity of output supplied decreases. At a price level of 75, the quantity of output demanded is 600 billion dollars which is equal to the quantity of output supplied. Therefore, the equilibrium level of output is 600 billion dollars.

-Refer to the Aggregate Demand and Aggregate Supply Schedules in }