Macro equilibrium always occurs when
A)Aggregate supply is greater than aggregate demand.
B)The labor force is fully employed.
C)Aggregate demand equals aggregate supply at a given average price level.
D)The level of output is expanding.

Question

Quizplus · Accepted Answer

Macro equilibrium occurs when aggregate demand equals aggregate supply at a given average price level. This means that the quantity of goods and services demanded by consumers, firms, and the government is equal to the quantity of goods and services supplied by firms in the economy. This results in a balance between total spending and total production, which is the foundation of macroeconomic stability. Options A, B, and D are incorrect because they do not reflect the conditions for macro equilibrium.

Macro Equilibrium Always Occurs When