n Japan potential GDP is 600 trillion yen and the table bel

n Japan, potential GDP is 600 trillion yen (¥) and the table below shows Japan’s aggregate demand and short-run aggregate supply schedule. Price level Real GDP demanded (trillions of yen) Real GDP supplied in the short–run (trillions of yen) 75 600 400 85 550 450 95 500 500 105 450 550 115 400 600 125 350 650 135 300 700 a) Draw a graph of the aggregate demand curve and the short-run aggregate supply curve. (10) b) What is the short-run equilibrium real GDP and price? (2) c) Determine and explain the GDP gap. (8)

Solution

Data is not charted properly