The figure given below represents the equilibrium real GDP and price level in the aggregate demand and aggregate supply model.?Figure 8.3

-Refer to Figure 8.3. If AS₁ and AD₁ represent the initial aggregate demand and supply in the economy, the long-run equilibrium real GDP will be _____ billion.
A) $100
B) $200
C) $300
D) $400
E) $500

Question

The figure given below represents the equilibrium real GDP and price level in the aggregate demand and aggregate supply model.?Figure 8.3
 
-Refer to Figure 8.3. If AS₁ and AD₁ represent the initial aggregate demand and supply in the economy, the long-run equilibrium real GDP will be _____ billion.
A) $100 
B) $200 
C) $300 
D) $400 
E) $500

Quizplus · Accepted Answer

The long-run equilibrium occurs at the intersection of the long-run aggregate supply and the aggregate demand curves. In the given figure, AS₂ is the long-run aggregate supply curve. The long-run equilibrium real GDP occurs at the intersection of AD₁ and AS₂, which is at $300 billion.

The Figure Given Below Represents the Equilibrium Real GDP and Price