When determining algebraically the current level of aggregate output from an equation for aggregate demand such as Y = 3401 + 2.887M/P, you must know
A) last period's money supply.
B) last period's price level.
C) this period's price level.
D) last period's inflation rate.
E) this period's inflation rate.

Question

Quizplus · Accepted Answer

To determine the current level of aggregate output (Y), you need the current period's price level (P) to solve the equation Y = 3401 + 2.887M/P.

When Determining Algebraically the Current Level of Aggregate Output from an Equation