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
Definitions:
Economy's Expenditure
The total spending in an economy, including consumption, investment, government purchases, and net exports.
Total Income
The sum of all earnings received by an individual or entity, including wages, salaries, benefits, and other forms of compensation.
Total Expenditure
The total amount spent on goods and services over a specific period.
Circular-Flow Diagram
A visual model of the economy that shows how dollars flow through markets among households and firms.
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