The following question are based on the following diagram:

-An equilibrium level of output and an equilibrium price level occur
A) only when the aggregate supply curve is horizontal.
B) when the price level equals the level of national output.
C) as long as the aggregate demand curve slopes upward.
D) where the aggregate supply and demand curves intersect.
E) in the short run only with specific government intervention.

Question

The following question are based on the following diagram:
 
-An equilibrium level of output and an equilibrium price level occur
A) only when the aggregate supply curve is horizontal. 
B) when the price level equals the level of national output. 
C) as long as the aggregate demand curve slopes upward. 
D) where the aggregate supply and demand curves intersect. 
E) in the short run only with specific government intervention.

Quizplus · Accepted Answer

Equilibrium level of output and price level occur where the aggregate supply and demand curves intersect. This is because at this point, the quantity demanded equals the quantity supplied at a given price level, resulting in a stable equilibrium.

The Following Question Are Based on the Following Diagram