In the short run, the intersection of the aggregate demand and the short-run aggregate supply curves,
A) determines the equilibrium price level.
B) determines the equilibrium level of real GDP.
C) is a point where there is neither a surplus nor a shortage of goods.
D) All of the above answers are correct.

Question

Quizplus · Accepted Answer

In the short run, the intersection of the aggregate demand and short-run aggregate supply curves determines both the equilibrium price level and the equilibrium level of real GDP, and it is a point where there is neither a surplus nor a shortage of goods.

In the Short Run, the Intersection of the Aggregate Demand