Which of the following adjusts to bring aggregate supply and demand into balance?
A)the price level and real output
B)the real rate of interest and the money supply
C)government expenditures and taxes
D)the saving rate and net exports

Question

Quizplus · Accepted Answer

The price level and real output are the primary variables that adjust to bring aggregate supply and demand into balance. If aggregate demand exceeds aggregate supply, then prices and output will increase until equilibrium is reached. If aggregate supply exceeds aggregate demand, then prices and output will decrease until equilibrium is reached. The other options listed may impact aggregate supply and demand, but they do not directly adjust to bring them into balance.

Which of the Following Adjusts to Bring Aggregate Supply and Demand