Using Figure 8.5,if the equilibrium price level is P₁,then aggregate demand is A)AD₂,and the equilibrium output level is Q₂. B)AD₂,and the equilibrium output level is Q₁. C)AD₁,and the equilibrium output level is Q₃. D)AD₁,and the equilibrium output level is Q₂.

Question

Quizplus · Accepted Answer

According to the graph, the equilibrium price level is at PS1U1B11S1U1B0, which intersects with the aggregate demand curve ADS1U1B11S1U1B0 and the short-run aggregate supply curve S1U1B11. The corresponding equilibrium output level is at QS1U1B12S1U1B0. Therefore, the correct choice is D.