Figure 21-2. On the left-hand graph, MS represents the supply of money and MD represents the demand for money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along the axes of both graphs.
-Refer to Figure 21-2. What does Y represent on the horizontal axis of the right-hand graph?
A)the quantity of money
B)the rate of inflation
C)real output
D)nominal output

Question

Figure 21-2. On the left-hand graph, MS represents the supply of money and MD represents the demand for money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along the axes of both graphs. 
-Refer to Figure 21-2. What does Y represent on the horizontal axis of the right-hand graph?
A)the quantity of money 
B)the rate of inflation 
C)real output 
D)nominal output

Quizplus · Accepted Answer

Y represents real output on the horizontal axis of the right-hand graph. The vertical axis measures the price level. The relationship between the two axes shows the relationship between aggregate demand and aggregate supply in the economy. Real output is the quantity of goods and services produced by the economy, regardless of changes in prices.