Macroeconomic equilibrium is described as the combination of
A)potential output and price level that is on both the AD curve and AS curve.
B)real GDP and price level that is on both the AD curve and 45-degree line.
C)real GDP and price level that is on both the AD curve and AS curve.
D)all individual demand curves and all individual supply curves.
E)all individual demand curves and potential GDP.

Question

Quizplus · Accepted Answer

Macroeconomic equilibrium is the point where aggregate demand (AD) and aggregate supply (AS) intersect. This intersection represents the point where output (real GDP) and the price level are both consistent with both AD and AS, and is the point where the economy is in balance. Therefore, choice C accurately describes the combination of real GDP and price level that is on both the AD curve and AS curve.

Macroeconomic Equilibrium Is Described as the Combination of