Answer
a) Set data (B) illustrates aggregate supply in the immediate short run. This is because the price level does not have time to adjust in the immediate short run. Only output can change. Set data (A) illustrates aggregate supply in the short run. This is because the price level only has time to partially adjust in the short run. Both price level and output can change. Set data (C) illustrates aggregate supply in the long run. This is because the price level only has time to adjust in the long run. Only price can change.
b) The new data shows, when real GDP increases, aggregate supply will also increase.
Work Step by Step
Price level = 110, Real GDP (new) = 302.5
Price level = 100, Real GDP (new) = 275
Price level = 95, Real GDP (new) = 247.5
Price level = 90, Real GDP (new) = 220
