Which one of the following is TRUE?
A) The intersection of aggregate demand and aggregate supply identifies an equilibrium interest rate and an equilibrium wage level.
B) The intersection of aggregate demand and aggregate supply identifies an equilibrium interest rate and an equilibrium level of exports.
C) The intersection of aggregate demand and aggregate supply identifies an equilibrium level of employment and an equilibrium level of investment.
D) The intersection of aggregate demand and aggregate supply identifies an equilibrium price level and an equilibrium level of real GDP.

Question

Quizplus · Accepted Answer

The intersection of aggregate demand and aggregate supply identifies an equilibrium price level and an equilibrium level of real GDP. This is because the point of intersection represents the level of output where the total quantity of goods and services demanded in the economy equals the total quantity of goods and services supplied, which means that all goods and services produced will be sold at the equilibrium price level.

Which One of the Following Is TRUE