The following are aggregate demand and supply schedules for a hypothetical economy.All figures are in $ billions.
Note: Potential GDP is 3,000.
-Refer to the information above to answer this question.What will equilibrium price level and GDP be?
A)150 and 2,600
B)150 and 3,000
C)170 and 3,600
D)170 and 3,000

Question

The following are aggregate demand and supply schedules for a hypothetical economy.All figures are in $ billions.
  Note: Potential GDP is 3,000.
-Refer to the information above to answer this question.What will equilibrium price level and GDP be?
A)150 and 2,600 
B)150 and 3,000 
C)170 and 3,600 
D)170 and 3,000

Quizplus · Accepted Answer

Equilibrium GDP is where AD=AS, and equilibrium price level is the corresponding price level. In this case, AD=AS at GDP=3,000 and price level=$170 billion. Therefore, the answer is D, 170 and 3,000.

The Following Are Aggregate Demand and Supply Schedules for a Hypothetical