Short-run macroeconomic equilibrium cannot be achieved when:

Question

Quizplus · Accepted Answer

Short-run macroeconomic equilibrium occurs when the quantity of aggregate demand equals the quantity of short-run aggregate supply. Therefore, if the quantity of short-run aggregate supply exceeds the quantity of aggregate demand, short-run macroeconomic equilibrium cannot be achieved. Option A and D are incorrect because inflation rates do not play a role in determining whether short-run macroeconomic equilibrium is achieved or not. Option B is incorrect because the intersection of the short-run aggregate supply and aggregate demand curves is the point at which short-run macroeconomic equilibrium is achieved.

Short-Run Macroeconomic Equilibrium Cannot Be Achieved When