The output level at which the aggregate demand curve intersects the aggregate supply is always the level at which
A)Saving is zero.
B)Macro equilibrium is achieved.
C)Full employment is sustainable by the economy.
D)Micro equilibrium is achieved.

Question

Quizplus · Accepted Answer

The intersection of aggregate demand and aggregate supply curves represents macroeconomic equilibrium, where the quantity of goods and services demanded by the economy is equal to the quantity of goods and services supplied by the economy. This level of output and price level may or may not include full employment or zero savings, but it is where the economy is in balance in terms of overall spending and production. Therefore, B is the best choice.

The Output Level at Which the Aggregate Demand Curve Intersects