![FIGURE 13.3](cowentabarrokmacro3e_ch13_fig_3.jpg)
The Aggregate Demand Curve If spending is growing by 5% a year but real growth is 0%, then prices must be rising by 5%, that is, the inflation rate must be 5% (point a). If spending is growing by 5% and real growth is 3%, then inflation must be 2% (point b). If spending is growing by 5% and real growth is 5%, then what is the inflation rate?