-In the above figure, what are the long-run equilibrium price level and real GDP?
A) 130 and $12 trillion
B) 130 and $11.5 trillion
C) 120 and $11.5 trillion
D) 120 and $12 trillion

Question

-In the above figure, what are the long-run equilibrium price level and real GDP?
A) 130 and $12 trillion 
B) 130 and $11.5 trillion 
C) 120 and $11.5 trillion 
D) 120 and $12 trillion

Quizplus · Accepted Answer

The long-run equilibrium price level is 130 and real GDP is $12 trillion. This is because the long-run aggregate supply curve is vertical, which means that real GDP is fixed in the long run. The long-run aggregate demand curve is upward sloping, which means that the price level will rise in the long run as the economy grows.

-In the Above Figure, What Are the Long-Run Equilibrium Price