Key Quesiton 4
a) Equilibrium: $300 Billion. It is not neccesarily the full employment level of output, because the output has to be compatible with the demand.
b) These price levels will not be equilibrium because the amount of real GDP demanded and supplied do not match.
c) Some factors of aggregate demand are;
- consumer wealth,
- taxes,
- consumer expectations
- real interest rates
Key Question 5
a) Productivity
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