Question

The following is the aggregate demand curve of an economy.

P = 800 - 2Y
Suppose that the price level is 120.
The aggregate level of output demanded would be __________

Answer 1

The aggregate level of output demanded when the price level is 120 is equal to 340.

Step-by-step explanation:

To find the aggregate level of output demanded when the price level is 120, we need to substitute the given price level into the aggregate demand equation.

P = 800 - 2Y
Since the price level is 120, we have:
120 = 800 - 2Y
2Y = 800 - 120
2Y = 680
Y = 340

Therefore, the aggregate level of output demanded would be 340.