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.
-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.

Question

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.  
-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.

Quizplus · Accepted Answer

Point B on the left-hand graph corresponds to an inflation rate of approximately 2% on the right-hand graph. Follow the vertical line up from 2% to the SRAS curve and then over to the vertical axis. This corresponds to a price level of approximately 114.95, so the answer is B.