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Figure: Aggregate Demand
-(Figure: Aggregate Demand)Point B on this aggregate demand curve represents an inflation rate of:
A) 3%.
B) 4%.
C) 5%.
D) 7%.

Question

Use the following to answer questions 
Figure: Aggregate Demand 
-(Figure: Aggregate Demand)Point B on this aggregate demand curve represents an inflation rate of:
A) 3%. 
B) 4%. 
C) 5%. 
D) 7%.

Quizplus · Accepted Answer

Point B on the aggregate demand curve represents a price level of 110 and a real GDP of $18 trillion. The intersection of the aggregate demand curve with the short-run aggregate supply curve at this point indicates an inflation rate of 4%.

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