Exhibit 16-2
-In Exhibit 16-2,the aggregate demand in the economy is represented by AD₀ and the short run aggregate supply by SRAS₁₁₀.Which of the following represents the long-run equilibrium in the economy?

Question

Exhibit 16-2 Exhibit 16-2 -In Exhibit 16-2,the aggregate demand in the economy is represented by AD<sub>0</sub> and the short run aggregate supply by SRAS<sub>110</sub>.Which of the following represents the long-run equilibrium in the economy? A) A B) B C) C D) D E) E

Exhibit 16-2 -In Exhibit 16-2,the aggregate demand in the economy is represented by AD<sub>0</sub> and the short run aggregate supply by SRAS<sub>110</sub>.Which of the following represents the long-run equilibrium in the economy? A) A B) B C) C D) D E) E

-In Exhibit 16-2,the aggregate demand in the economy is represented by AD₀ and the short run aggregate supply by SRAS₁₁₀.Which of the following represents the long-run equilibrium in the economy?

Quizplus · Accepted Answer

The long-run equilibrium occurs where the aggregate demand curve intersects with the long-run aggregate supply curve (LRAS), as this represents the full employment level of output. In this case, that intersection occurs at point C. Both A and B represent short-run equilibriums with output levels above the long-run potential level, while D and E represent short-run equilibriums with output levels below the long-run potential level.

Exhibit 16-2 -In Exhibit 16-2,the Aggregate Demand in the Economy Is Represented