The short-run equilibrium in the dynamic model of aggregate demand and aggregate supply is determined by the intersection of the: A) DAD_t and DAS_t_-₁ B) DAD_t and DAS_t C) Y_t and DAS_t D) DAD_t_-₁ and Y_t

Question

Quizplus · Accepted Answer

The short-run equilibrium in the dynamic model of aggregate demand and aggregate supply is determined by the intersection of the AD and AS curves, which are represented by the equations DAD_t and DAS_t, respectively. Therefore, the correct choice is B, which includes both of these equations. The other choices either include irrelevant variables (choice A) or incorrect equations (choices C and D).

The Short-Run Equilibrium in the Dynamic Model of Aggregate Demand