In the short run, the intersection of the aggregate demand and the short-run aggregate supply curves,
A) determines the equilibrium price level.
B) is a point where there is neither a surplus nor a shortage of goods.
C) determines the equilibrium level of real GDP.
D) All of the above answers are correct.

Question

Quizplus · Accepted Answer

In the short run, the intersection of the aggregate demand and short-run aggregate supply curves indeed determines the equilibrium price level, ensures there is neither a surplus nor a shortage of goods, and determines the equilibrium level of real GDP.

In the Short Run, the Intersection of the Aggregate Demand