When the economy is operating at a point where aggregate demand equals short-run aggregate supply, it must be true that:
A) aggregate demand also equals long-run aggregate supply.
B) the short-run level of output is not the same as long-run potential output.
C) prices are higher than expected prices.
D) None of these must be true.

Question

Quizplus · Accepted Answer

When aggregate demand equals short-run aggregate supply, it does not necessarily mean that any of the other conditions (A, B, or C) must be true. The economy could be at an equilibrium in the short run without these conditions being met.

When the Economy Is Operating at a Point Where Aggregate