The equilibrium level of real GDP occurs where the aggregate supply curve and the aggregate demand curve intersect.

Question

Quizplus · Accepted Answer

This is the definition of the equilibrium level of real GDP, also known as the macroeconomic equilibrium. It is the point where the quantity of goods and services supplied by firms is equal to the quantity of goods and services demanded by households, businesses, and the government. At this point, there is no excess supply or demand, and the economy is operating at full capacity.

The Equilibrium Level of Real GDP Occurs Where the Aggregate