Graphically long-run equilibrium occurs at the intersection of the aggregate demand curve and the:
A)expenditure line.
B)short-run aggregate supply line.
C)long-run aggregate supply line.
D)short-run aggregate supply line and the long-run aggregate supply line.

Question

Quizplus · Accepted Answer

Long-run equilibrium is a situation in which actual output equals potential output and the inflation rate is stable. Graphically, long-run equilibrium occurs when the AD curve, the SRAS line, and the LRAS line all intersect at a single point.

Graphically Long-Run Equilibrium Occurs at the Intersection of the Aggregate