A short-run macroeconomic equilibrium occurs
A) at the intersection of the short-run aggregate supply curve and the long-run aggregate supply curve.
B) when the rate at which prices of goods and services increase equals the rate at which money wage rates increase.
C) at the intersection of the short-run aggregate supply curve and the aggregate demand curve.
D) at the intersection of the short-run aggregate supply curve, the long-run aggregate supply curve, and the aggregate demand curve.

Question

Quizplus · Accepted Answer

A short-run macroeconomic equilibrium occurs at the intersection of the short-run aggregate supply curve and the aggregate demand curve, where the quantity of aggregate output demanded equals the quantity of aggregate output supplied in the short-run. This point can be at different levels of output and price level than the long-run equilibrium, which occurs at the intersection of the short-run and long-run aggregate supply curves and the aggregate demand curve. Option A and D are incorrect as they refer to long-run equilibrium, while option B is not a complete definition of short-run equilibrium.

A Short-Run Macroeconomic Equilibrium Occurs