The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 120, and the quantity of output demanded is $500 billion. Moving up along the aggregate demand curve from point A to point B, the price level rises to 140, and the quantity of output demanded falls to $300 billion. PRICE LEVEL 170 130 120 888 100 150 140 110 100 90 100 200 300 400 500 AD 600 700 600 OUTPUT (Billions of dollars)
The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 120, and the quantity of output demanded is $500 billion. Moving up along the aggregate demand curve from point A to point B, the price level rises to 140, and the quantity of output demanded falls to $300 billion. PRICE LEVEL 170 130 120 888 100 150 140 110 100 90 100 200 300 400 500 AD 600 700 600 OUTPUT (Billions of dollars)
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Transcribed Image Text:The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 120, and the quantity of output
demanded is $500 billion. Moving up along the aggregate demand curve from point A to point B, the price level rises to 140, and the quantity of
output demanded falls to $300 billion.
PRICE LEVEL
170
130
120
888
100
150
140
110
100
90
100
200
300
400
500
AD
600
700
600
OUTPUT (Billions of dollars)
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