Economics 13th Edition by James Gwartney, Richard Stroup, Russell Sobel, David Macpherson

Exercise 14

The following chart indicates the aggregate demand ( AD ) and short-run aggregate supply ( SRAS ) schedules of decisionmakers for the current period. Both buyers and sellers previously anticipated that the price level during the current period would be P 105.
a. Indicate the quantity of GDP that will be produced during this period.
b. Will it be a long-run equilibrium level of GDP? Why or why not?
c. What will the relationship between the actual and natural rates of unemployment be during the period? Explain your answer.