Exhibit 14A-6 Aggregate demand and supply model

-Based on Exhibit 14A-6,when the aggregate demand curve is in the position AD₁,the economy's position of long-run equilibrium corresponds to point:
A) E₁.
B) E₂.
C) E₃.
D) E₁ or E₂.

Question

Exhibit 14A-6 Aggregate demand and supply model
 
-Based on Exhibit 14A-6,when the aggregate demand curve is in the position AD₁,the economy's position of long-run equilibrium corresponds to point:
A) E₁. 
B) E₂. 
C) E₃. 
D) E₁ or E₂.

Quizplus · Accepted Answer

The aggregate demand curve in the position AD₁ intersects the aggregate supply curve at point E₁, which represents the economy's position of long-run equilibrium.

Exhibit 14A-6 Aggregate Demand and Supply Model