Question

In: Economics

Long-run macroeconomic equilibrium occurs when

Long-run macroeconomic equilibrium occurs when

Select one:

a. Aggregate demand equals short-run aggregate supply.

b. Aggregate demand equals short-run aggregate supply and they intersect at a point on the long-run supply curve.

c. Structural and frictional unemployment equals zero.

d. Output is above potential GDP.

Solutions

Expert Solution

b. Aggregate demand equals short-run aggregate supply and they intersect at a point on the long-run supply curve.

The long-run equilibrium of the economy is found where the aggregate demand curve intersects the long-run aggregate supply curve at point A.

Rahul Sunny answered 2 years ago
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