Consider the graph shown here. The equilibrium level of GDP is: A)Q₀. B)Q₁. C)Q₂. D)Q₃.

Question

Quizplus · Accepted Answer

The equilibrium level of GDP is where the aggregate demand curve intersects with the aggregate supply curve. In this graph, the AD curve intersects with the short-run AS curve at point Q₁. This indicates that at a GDP level of $11 trillion (on the x-axis), the quantity of goods and services demanded (on the y-axis, represented by AD) is equal to the quantity of goods and services supplied (also on the y-axis, represented by AS). Therefore, the correct answer is B.

Consider the Graph Shown Here