Figure 22-1

question 18

Multiple Choice

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. Also suppose we know that the price index equaled 120 in 2011. Then the numbers 115 and 130 on the vertical axis of the left-hand graph would have to be replaced by

• A)155 and 175, respectively.
• B)138 and 156, respectively.
• C)137.5 and 154.75, respectively.
• D)135 and 150, respectively.

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Definitions:

Production Process

The series of steps and procedures involved in the creation of a product from raw materials.

Cycle

In various contexts, it refers to a series of events that repeat in a predictable sequence or timeframe.

Trend

A general direction in which something is developing or changing, often identified in data analysis to forecast future values.

Level Shift

A term often used in time series analysis indicating a change in the mean level of a series at a certain point in time.