The left part of the table describes four possible situations that might arise in 2020, depending on the level of aggregate demand in 2020. The right part of the table describes four possible situations that might arise in 2021. Use the table to work Problems.

Plot the short-run Phillips curve and aggregate supply curve for 2020 and mark the points A, B, C, and D on each that correspond to the data in the left part of the table.

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Data 2020 Price level (2019 = 100) 2019 dollars) 102 104 ABCD D 106 110 Real GDP Unemployment (trillions of rate 10.0 10.1 10.2 10.4 (percent) 8 6 642 2 Data 2021 ABCD D Price level Real GDP Unemployment (trillions of rate (Percent) 8 (2019 = 100) 2019 dollars) 108 110 112 116 10.3 10.4 10.5 10.7 642