The following question are based on the following diagram:

-The maximum national output and employment occur when the economy's aggregate demand curve intersects the aggregate supply curve in
A) the horizontal range.
B) the upward-sloping range.
C) the vertical range.
D) all three ranges.
E) a manner impossible to determine from the diagram.

Question

The following question are based on the following diagram:
 
-The maximum national output and employment occur when the economy's aggregate demand curve intersects the aggregate supply curve in
A) the horizontal range. 
B) the upward-sloping range. 
C) the vertical range. 
D) all three ranges. 
E) a manner impossible to determine from the diagram.

Quizplus · Accepted Answer

The point where the aggregate demand curve intersects the aggregate supply curve in the vertical range represents the maximum production capacity of the economy. At this point, the economy is producing at full capacity, and all available resources are being utilized. Thus, the national output and employment are at their maximum level.

The Following Question Are Based on the Following Diagram