Macroeconomics 10th Edition by Roger Arnold

Exercise 17

Suppose that the economy is self-regulating, char the price level is 132, that the quantity demanded of Real GDP is $4 trillion, that the quantity supplied of Real GDP in the short run is $3.9 trillion, and that the quantity supplied of Real GDP in the long run is $4.3 trillion. Is the economy in short-run equilibrium? Will the price level in long-run equilibrium be greater than, less than, or equal to 132? Explain your answers.