Figure 35-3.The left-hand graph shows a short-run aggregate-supply (SRAS)curve and two aggregate-demand (AD)curves.On the left-hand diagram,Y represents output and on the right-hand diagram,U represents the unemployment rate.
-Refer to Figure 35-3.Assume the figure charts possible outcomes for the year 2018.In 2018,the economy is at point B on the left-hand graph,which corresponds to point B on the right-hand graph.Also,point A on the left-hand graph corresponds to A on the right-hand graph.The price level in the year 2018 is
A)155.56.
B)159.00.
C)163.50.
D)170.04.

Question

Figure 35-3.The left-hand graph shows a short-run aggregate-supply (SRAS)curve and two aggregate-demand (AD)curves.On the left-hand diagram,Y represents output and on the right-hand diagram,U represents the unemployment rate.  
-Refer to Figure 35-3.Assume the figure charts possible outcomes for the year 2018.In 2018,the economy is at point B on the left-hand graph,which corresponds to point B on the right-hand graph.Also,point A on the left-hand graph corresponds to A on the right-hand graph.The price level in the year 2018 is
A)155.56. 
B)159.00. 
C)163.50. 
D)170.04.

Quizplus · Accepted Answer

According to the left-hand graph, at point B, the output level is around Y = 250 and the price level is around P = 163.5. This corresponds to point B on the right-hand graph with an unemployment rate of U = 4.5%. Therefore, the price level in 2018 is approximately 163.50.