Problem
Suppose that we have an AEF given by the following AE = 6 (200-p)+0.7y where the marginal propensity to consumer is 0.8 the tax rate is 0.10 and the marginal propensity to import is 0.02 government spending is currently $200. Suppose that short-run aggregate supply (SRAS) in this economy is also given by Y = 5P Suppose also that potential GDP (Y*) in this economy is equal to $900. What is the equilibrium aggregate demand (AD) in this economy as a function of the price level?