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Q. Consider an economy with the following aggregate demand (AD) and short-run aggregate supply (SRAS) schedules. Decision-makers have previously made decisions anticipating that the price level during the current period will be P105.
a. Indicate the quantity of GDP that will be produced during the period.
b. Explain why or why not a long-run equilibrium level of GDP?
c. How will the unemployment rate during the current period compare with the natural rate of unemployment?
d. Will the current rate of GDP be sustainable into future? Why or why not?
AD105 Price Level SRAS 1056300 90 45006000 95 48005700 100 51005400 105 54005100 110 57004800 115 6000
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