Question 45 Figure $$ 10-18 $$ 362 e0boc-157c-4756-9234-a5d24b9bc023.PNG Beginning from long-run equilibrium at point $$ \mathrm{E}_{1} $$ in Figure 10-18, the aggregate demand curve shifts to $$ \mathrm{AD}_{2} $$. The real GDP and price level (CPI) in short-run equilibrium will be (1) $$ \$ 10 $$ billion and 150 . (2) $$ \$ 10 $$ billion and 100 . (3) $$ \$ 4 $$ billion and 150 . (4) $$ \$ 10 $$ billion and 200 .

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In this scenario, we are looking at the effects of a shift in the aggregate demand curve from $$ AD_1 $$ to $$ AD_2 $$ on real GDP and the price level (CPI) in the short-run equilibrium. The initial equilibrium point is $$ E_1 $$, and we need to determine the new equilibrium after the shift.
When the aggregate demand curve shifts to the right (from $$ AD_1 $$ to $$ AD_2 $$), it typically leads to an increase in both the real GDP and the price level in the short run. We need to evaluate the provided options based on this understanding.
We will consider the implications of the shift in aggregate demand on the real GDP and price level:

1. $$ \$ 10 $$ billion and 150
2. $$ \$ 10 $$ billion and 100
3. $$ \$ 4 $$ billion and 150
4. $$ \$ 10 $$ billion and 200

Since the aggregate demand has increased, we can expect the real GDP to be at least at the long-run equilibrium level, which is likely around $$ \$ 10 $$ billion. The price level should also increase due to the higher demand. Therefore, options (1) and (4) are more plausible than (2) and (3).
Given that the price level is expected to rise due to the shift in aggregate demand, option (4) $$ \$ 10 $$ billion and 200 is the most likely outcome, as it reflects an increase in both real GDP and price level.
The real GDP and price level in short-run equilibrium after the shift to $$ AD_2 $$ will be $$ \$ 10 $$ billion and 200 (Option 4).

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