A long run equilibrium occurs at the intersection of the short-run aggregate supply curve and the
A)long-run aggregate investment curve.
B)aggregate demand curve.
C)planned aggregate expenditure curve.
D)investment demand curve

Question

Quizplus · Accepted Answer

In the long run, all factors of production are variable, meaning that the short-run aggregate supply curve will shift until it intersects with the aggregate demand curve at potential GDP. Therefore, the long run equilibrium occurs at the intersection of the short-run aggregate supply curve and the aggregate demand curve.

A Long Run Equilibrium Occurs at the Intersection of the Short-Run