Oh yes. It is a well known graph. I too have it in my texts. Economic "theories," which are mostly hypotheses rather than theories, depend on assumptions. The problem for economists is that their assumptions often prove to be wrong. Here is one of my favorite examples. When there is hyperinflation economists assume wages will be spent immediately; when there is deflation economists assume wages will be saved until prices are lower. The first assumption holds well, the second does not hold, with the exception of high cost, capital equipment for which purchase is often delayed when their is deflation. The reason the second assumption does not hold with regard to wages is that it runs into two hurdles: one is human nature which favors gratification now; the other is general economic conditions that usually accompany deflation. Economists haven't figured out how to get people to read economic textbooks so they will know how they are supposed to behave.
