The variables on the vertical and horizontal axes of the aggregate demand and supply graph are
A)the price level and real output.
B)real output and employment.
C)employment and the inflation rate.
D)the value of money and the price level.

Question

Quizplus · Accepted Answer

The vertical axis in the aggregate demand and supply graph represents the price level, while the horizontal axis represents real output. Therefore, the correct answer is A, which indicates that the variables on the vertical and horizontal axes are the price level and real output, respectively. B and C are incorrect because they do not reflect the variables on the aggregate demand and supply graph. D is incorrect because it suggests the use of a different graph altogether.

The Variables on the Vertical and Horizontal Axes of the Aggregate