Macro equilibrium always occurs:
A) When aggregate supply is greater than aggregate demand.
B) When the labor force is fully employed.
C) When aggregate demand equals aggregate supply at the average price level.
D) At a zero inflation rate.

Question

Quizplus · Accepted Answer

Macro equilibrium occurs when aggregate demand equals aggregate supply at the average price level, indicating that the economy is operating at full output and employment without any excess demand or supply pressures. Thus, choice C is the correct answer. Choices A, B, and D are incorrect as they do not necessarily guarantee macro equilibrium.

Macro Equilibrium Always Occurs