Short-run macroeconomic equilibrium occurs when
A)aggregate demand and short-run aggregate supply intersect.
B)the equilibrium lies on the long-run aggregate supply curve.
C)structural and frictional unemployment equal zero.
D)cyclical unemployment is equal to zero.
E)A and B

Question

Quizplus · Accepted Answer

Short-run macroeconomic equilibrium occurs when aggregate demand and short-run aggregate supply intersect. This is the point where the quantity of output produced and the price level are determined in the short run. Option B is incorrect because the equilibrium point may not necessarily lie on the long-run aggregate supply curve in the short run. Options C and D are incorrect because they refer to unemployment, which may not necessarily be a determinant of short-run macroeconomic equilibrium.

Short-Run Macroeconomic Equilibrium Occurs When