Figure 22-1. The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves. On the right-hand diagram, U represents the unemployment rate.
-Refer to Figure 22-1. Suppose points F and G on the right-hand graph represent two possible outcomes for an imaginary economy in the year 2012, 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
A)130 in 2011.
B)115 in 2011.
C)110 in 2011.
D)100 in 2011.

Question

Figure 22-1. The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves. On the right-hand diagram, U represents the unemployment rate. 
-Refer to Figure 22-1. Suppose points F and G on the right-hand graph represent two possible outcomes for an imaginary economy in the year 2012, 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
A)130 in 2011. 
B)115 in 2011. 
C)110 in 2011. 
D)100 in 2011.

Quizplus · Accepted Answer

The problem suggests that points F and G on the right-hand graph correspond to points B and C on the left-hand graph, indicating a comparison of outcomes. If these points are being compared to a base year, the price index for that base year is typically set to 100.