Exhibit 14A-2 Macro AD-AS Model

I n Exhibit 14A- 2, the intersection of AD with SRAS indicates:

Name: Exhibit 14A-2 Macro AD-AS Model I n Exhibit 14A- 2, the intersection of AD with SRAS indicates:
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Question

Exhibit 14A-2 Macro AD-AS Model

I n Exhibit 14A- 2, the intersection of AD with SRAS indicates:

Quizplus · Accepted Answer

The intersection of AD with SRAS represents a short-run equilibrium, where the economy is producing at a level of output where aggregate demand equals short-run aggregate supply. It does not necessarily indicate full employment or the need for policies to increase unemployment.