Equilibrium GDP in the short-run is determined at the point where:
A)gross domestic production equals aggregate demand.
B)domestic production equals domestic consumption.
C)imports equal exports.
D)the rate of unemployment equals zero.

Question

Quizplus · Accepted Answer

Equilibrium GDP in the short-run is determined at the point where aggregate demand equals gross domestic production. This is because at this point, there will be no unplanned inventories, as firms will have produced exactly what consumers are willing to buy.

Equilibrium GDP in the Short-Run Is Determined at the Point