Figure 35-1

-Refer to Figure 35-1. Suppose points F and G on the right-hand graph represent two possible outcomes for an imaginary economy in the year 2020, and those two points correspond to points B and C, respectively, on the left-hand graph. Then it is apparent that the price index equaled

Question

Figure 35-1   ​
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-Refer to Figure 35-1. Suppose points F and G on the right-hand graph represent two possible outcomes for an imaginary economy in the year 2020, and those two points correspond to points B and C, respectively, on the left-hand graph. Then it is apparent that the price index equaled

Quizplus · Accepted Answer

The problem implies that the price index in 2020 is being compared to a base year, which is typically set at 100. Therefore, the price index in 2019, being the base year, would be 100.

Figure 35-1 ​

Figure 35-1