From the demand side, the equilibrium level of GDP is one at which

Question

Quizplus · Accepted Answer

The equilibrium level of GDP is the level at which aggregate demand equals production, meaning that there is no excess demand or excess supply in the economy. This implies that the economy is producing at its full potential and there is no cyclical unemployment. Option A and D are incorrect because they both refer to unemployment, whereas GDP is a measure of the overall level of economic activity. Option B is incorrect because it implies that there is still some level of unemployment, which would imply that the economy is not at full potential.

From the Demand Side, the Equilibrium Level of GDP Is