the the accompanying graph to answer the following questions Price Level 2 2 AG 12 14 16 18 20 Real GDP (in billions of dollars per year) The current macro equilibrium is when real GDP is $ b. The real GDP gap is S billion. The AD excess is $ billion Instructions: Enter your responses as a whole number a. Identify the macro equilibrium. Instructions: Use the tool provided 'Qg' to identify the current macro equilibrium on the graph. billion. Tools -9 GE billion. d identify the new equilibrium that would occur with appropriate fiscal policy. Instructions. Use the tool provided QF to identify the new equilibrium that would occur with appropriate fiscal policy This full employment GDP is $1

(Figure: Short- and Long-Run Equilibrlum I) Use Figure: Short- and Long-Run Equlibrium . If the economy le short-run maroeconomio wqbrum tE. appropriate polkcy to retum the economy to potential output would be atn): LRAS price l SRAS AD Real GDP potential output Oa decrease in taxes. Ob increase in government spending. Oc increase in transfer payments. Od. decrease in government spending.

Match each definition to the appropriate component of aggregate demand. Definition The sum of the expenditures of business firms on new plant, equipment, and software and of households on new homes The goods and services purchased by all levels of government The total amount spent by consumers on newly produced goods and services The difference between exports and imports ⒸNet exports O Government spending Consumer Expenditure Which of the following components represents the largest piece of aggregate demand? O Consumer expenditure O Investment spending O Which of the following components represents the smallest piece of aggregate demand? O Consumer expenditure O Government spending O Investment spending ONet exports Investment Spending Government Spending Net Exports O O O O

Oc