When the aggregate demand curve and the short-run aggregate supply curve intersect
A)the long-run aggregate supply curve must also intersect at the same point.
B)inflation must be increasing.
C)structural and frictional unemployment equal zero.
D)the economy is in short-run macroeconomic equilibrium.

Question

Quizplus · Accepted Answer

When the aggregate demand curve and the short-run aggregate supply curve intersect, it indicates that the economy is in short-run macroeconomic equilibrium. This is the point where the quantity demanded equals the quantity supplied at the prevailing price level. This does not necessarily mean that the long-run aggregate supply curve intersects at the same point, nor does it imply anything about inflation or unemployment.

When the Aggregate Demand Curve and the Short-Run Aggregate Supply