Question

. If real GDP demanded at each price level increases by​ $50 billion, what is the new​ short-run macroeconomic equilibrium and the output​ gap? The new​ short-run macroeconomic equilibrium is at a real GDP of ​$ nothing billion and a price level of nothing. The economy has ▼ output gap.

Answer 1

The new​ short-run macroeconomic equilibrium is $600 billion and no output​ gap.

Step-by-step explanation:

The increase in demand of $50 billion is the rightward shift of aggregate demand as at each price level the demand increases by 50 units.

Price equilibrium was 110

where

Real GDP demanded = Real GDP supplied in the short run

575 = 575

As there is an increase in Real GDP demanded by 50 units so, their is an output gap of 50 units at price 110.

Resulting the increase in quantity demanded

The new equilibrium price is 120

Where

Quantity demanded = 550 + 50 = 600

Quantity supplied = 600

There is no output gap.