In Exhibit 2, the intersection of AD with SRAS indicates:
A)a short-run equilibrium.
B)a long-run equilibrium.
C)that the economy needs policies to reduce unemployment.
D)that the economy is at full employment.

Question

Quizplus · Accepted Answer

The intersection of Aggregate Demand (AD) with Short-Run Aggregate Supply (SRAS) indicates a short-run equilibrium, where the quantity of goods and services demanded equals the quantity supplied in the short run.

In Exhibit 2, the Intersection of AD with SRAS Indicates