The following are aggregate demand and supply schedules for a hypothetical economy. All figures are in $ billions. Aggregate Quantity Demanded Price Index Aggregate Quantity Supplied 3500 2360 3400 2400 3300 2480 3200 2600 3100 3000 2900 2800 120 130 140 150 160 170 180 190 An inflationary gap of 340. O A recessionary gap of 240. 2760 3000 3260 3600 Note: Potential GDP is 3,000. Refer to the information above to answer this question. Assume that technological change increases aggregate supply by 340. What would be the result? O A new full-employment level of Real GDP of 3,340 with no change in pri prices. A new equilibrium of Real GDP of some indeterminate level depending on how much prices fell A new full employment level of Real GDP of 3,340 and lower prices

The following are aggregate demand and supply schedules for a hypothetical economy. All figures are in $ billions. Aggregate Quantity Demanded Price Index Aggregate Quantity Supplied 3500 2360 3400 2400 3300 2480 3200 2600 3100 3000 2900 2800 120 130 140 150 160 170 180 190 An inflationary gap of 340. O A recessionary gap of 240. 2760 3000 3260 3600 Note: Potential GDP is 3,000. Refer to the information above to answer this question. Assume that technological change increases aggregate supply by 340. What would be the result? O A new full-employment level of Real GDP of 3,340 with no change in pri prices. A new equilibrium of Real GDP of some indeterminate level depending on how much prices fell A new full employment level of Real GDP of 3,340 and lower prices

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 16E

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