Use the following to answer questions .
Exhibit: Monetary Policy and Long-Run Aggregate Demand and Aggregate Supply
-(Exhibit: Monetary Policy and Long-Run Aggregate Demand and Aggregate Supply) Short-run but not long-run equilibrium positions occur at points
A) a and b.
B) b and c.
C) c and d.
D) a and c.

Question

Use the following to answer questions .
Exhibit: Monetary Policy and Long-Run Aggregate Demand and Aggregate Supply 
-(Exhibit: Monetary Policy and Long-Run Aggregate Demand and Aggregate Supply) Short-run but not long-run equilibrium positions occur at points
A) a and b. 
B) b and c. 
C) c and d. 
D) a and c.

Quizplus · Accepted Answer

Short-run equilibrium positions occur at points b and c because they are where the AD and SRAS curves intersect. These positions, however, are not sustainable in the long run as they may result in inflation or recession. The long-run equilibrium position occurs at point a where the LRAS, AD, and SRAS intersect.

Use the Following to Answer Questions