Answer questions a through F on the basis of the following graph:    a. If the actual price level exceeds the expected price level reflected in long term contracts, real GDP equals ____________ and the actual price level equals _________ in the short run.  b. The situation described in part a result in a _________ gap equals to ____________.  c. If the actual price level is lower than the expected price level reflected in long term contracts, real GDP equals __________ and the actual price level equals ________ in the short run.  d. The situation described in part C result in a ________ gap equal to ___________

The Greek letter a represents a number that determines how much output responds to unexpected changes in the price level. In this case, assume that a = $2 billion. That is, when the actual price level exceeds the expected price level by 1, the quantity of output supplied will exceed the natural level of output by $2 billion. Suppose the natural level of output is $50 billion of real GDP and that people expect a price level of 110. On the following graph, use the purple line (diamond symbol) to plot this economy's long-run aggregate supply (LRAS) curve. Then use the orange line segments (square symbol) to plot the economy's short-run aggregate supply (AS) curve at each of the following price levels: 100, 105, 110, 115, and 120. PRICE LEVEL 125 120 115 110 105 100 95 90 85 80 75 0 10 20 ☐ 30 40 50 60 70 OUTPUT (Billions of dollars) 80 90 100 -0- AS LRAS (?) The short-run quantity of output supplied by firms will fall short of the natural level of output when the actual price level level…

Fill in the blanks. Answer questions a through d on the basis of the following graph:    a. If the actual price level exceeds the expected price level reflected in long term contracts, real GDP equals ____________ and the actual price level equals _________ in the short run.  b. The situation described in part a result in a _________ gap equals to ____________.  c. If the actual price level is lower than the expected price level reflected in long term contracts, real GDP equals __________ and the actual price level equals ________ in the short run.  d. The situation described in part C result in a ________ gap equal to ___________

Please write down a sentence or two for each one that explains the concept. Please include any formulas and rules that I should know for every subtopic aside from those two sentences.  I am studying for an exam and I want to understand these concepts throughly.

Part 2 Answer questions a through F on the basis of the following graph:  e. If the actual price level equals the expected price level reflected in long term contracts, real GDP equals _______ and the actual price level equals ________ in the short run.  f. The situation described in part E result in a _________ gap equal to __________