In our macro model,the level of aggregate output is determined in the short run by ________ but in the long run by the level of ________.
A)the output gap; factor productivity
B)the AD curve; interest rates
C)the AS curve; potential output
D)the AD and AS curves; Y*
E)the AD and AS curves; factor utilization

Question

Quizplus · Accepted Answer

In the short run, aggregate output is determined by the intersection of the Aggregate Demand (AD) and Aggregate Supply (AS) curves. In the long run, it is determined by the economy's potential output, denoted as Y*.

In Our Macro Model,the Level of Aggregate Output Is Determined