In the above figure, when the economy is in a long- run equilibrium, real GDP will be
A) $9.5 trillion.
B) $10.5 trillion.
C) $11.0 trillion.
D) $10.0 trillion.

Question

Quizplus · Accepted Answer

Long-run equilibrium occurs at the intersection of the aggregate demand (AD) and aggregate supply (AS) curves at potential GDP. In the above figure, the intersection of AD and AS occurs at a real GDP of $10.0 trillion. Therefore, the correct answer is option D, which is $10.0 trillion.

In the Above Figure, When the Economy Is in a Long-