Short-run macroeconomic equilibrium has NOT occurred if
A) inflation rates are low.
B) the short-run aggregate supply and aggregate demand curves intersect.
C) the short-run aggregate supply quantity exceeds the aggregate demand quantity.
D) inflation rates are high.

Question

Quizplus · Accepted Answer

Short-run macroeconomic equilibrium occurs when the short-run aggregate supply and aggregate demand curves intersect, indicating that the quantity of goods and services produced matches the quantity demanded. If the short-run aggregate supply quantity exceeds the aggregate demand quantity, then there is a surplus of goods and services, which may lead to lower prices and reduced production in the future. This does not represent a state of equilibrium in the short run. Inflation rates are not the sole determinant of short-run equilibrium.

Short-Run Macroeconomic Equilibrium Has NOT Occurred If