Suppose that aggregate demand and supply solution

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Suppose that aggregate demand and supply for a hypothetical economy are as shown:
Amount of
real domestic
output demanded,
billions
Price level
(price index) Amount of
real domestic
output supplied,
billions
$100
200
300
400
500 300
250
200
150
100 $450
400
300
200
100
a. Use these sets of data to graph the aggregate demand and aggregate supply curves. What is the equilibrium price level and the equilibrium level of real output in this hypothetical economy? Is the equilibrium real output also necessarily the full capacity real output? Explain.
b. Why will a price level of 150 not be an equilibrium price level in this economy? Why not 250?
c. Suppose that buyers desire to purchase $200 billion of extra real domestic output at each price level. Sketch in the new aggregate demand curve as AD1. What factors might cause this change in aggregate demand? What is the new equilibrium price level and level of real output?

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