If the intersection of the short-run aggregate supply and the aggregate demand curves also intersects the long-run aggregate supply curve, then the economy is:
A) at full employment.
B) operating at more than full employment.
C) in a recession.
D) operating at less than full employment.

Question

Quizplus · Accepted Answer

When the short-run aggregate supply and aggregate demand curves intersect at the long-run aggregate supply curve, the economy is at full employment, indicating that resources are being used efficiently without inflationary or recessionary gaps.

If the Intersection of the Short-Run Aggregate Supply and the Aggregate