$\begin{array} { c c c c }
\hline \begin{array} { c }
\text { Price level } \
\text { (GDP deflator) }
\end{array} & \begin{array} { c }
\text { Potential GDP } \
\text { (billions of 2005 dollars) }
\end{array} & \begin{array} { c }
\text { Real GDP supplied } \
\text { (billions of 2005 dollars) }
\end{array} & \begin{array} { c }
\text { Real GDP demanded } \
\text { (billions of 2005 dollars) }
\end{array} \
\hline 150 & 25 & 34 & 16 \
140 & 25 & 31 & 19 \
130 & 25 & 28 & 22 \
120 & 25 & 25 & 25 \
110 & 25 & 23 & 28 \
\hline
\end{array}$
The table above gives data for the nation of Pearl, a small island in the South Pacific.
- When the economy is at full employment the price level is
A)130.
B)120.
C)140.
D)110.
E)150.

Question

$\begin{array} { c c c c } 
\hline \begin{array} { c } 
\text { Price level } \
\text { (GDP deflator) }
\end{array} & \begin{array} { c } 
\text { Potential GDP } \
\text { (billions of 2005 dollars) }
\end{array} & \begin{array} { c } 
\text { Real GDP supplied } \
\text { (billions of 2005 dollars) }
\end{array} & \begin{array} { c } 
\text { Real GDP demanded } \
\text { (billions of 2005 dollars) }
\end{array} \
\hline 150 & 25 & 34 & 16 \
140 & 25 & 31 & 19 \
130 & 25 & 28 & 22 \
120 & 25 & 25 & 25 \
110 & 25 & 23 & 28 \
\hline
\end{array}$
The table above gives data for the nation of Pearl, a small island in the South Pacific.
- When the economy is at full employment the price level is
A)130.
B)120.
C)140.
D)110.
E)150.

Quizplus · Accepted Answer

At full employment, real GDP supplied equals potential GDP. This occurs at a price level of 120, where both are 25 billion dollars.

The Table Above Gives Data for the Nation of Pearl