Refer to Figure 35-4. 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 isa. 117.25b. 114.95c. 113.12d. 111.10 Figure 35-4. The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves. On the left-hand diagram, the price level is measured on the vertical axis; on the right-handdiagram, the inflation rate is measured on the vertical axis.Phillips CurveSRASВ4.5%112.22%High ADLow AD7.5%12.5%

The diagrams represents the income levels that change due to inflation in the economy. The right…

Answered: Refer to Figure 35-4. Assume the figure…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Refer to Figure 35-4. 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. 117.25

b. 114.95

c. 113.12

d. 111.10

Figure 35-4. The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves. On the left-hand diagram, the price level is measured on the vertical axis; on the right-hand
diagram, the inflation rate is measured on the vertical axis.
Phillips Curve
SRAS
В
4.5%
112.2
2%
High AD
Low AD
7.5%
12.5%

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