-In the above figure, if aggregate demand does not change, the long-run equilibrium will be at the price level of ________ and real GDP of ________.
A) 100; $17.5 trillion
B) 120; $18 trillion
C) 100; $18 trillion
D) 110; $17.5 trillion

Question

-In the above figure, if aggregate demand does not change, the long-run equilibrium will be at the price level of ________ and real GDP of ________.
A) 100; $17.5 trillion 
B) 120; $18 trillion 
C) 100; $18 trillion 
D) 110; $17.5 trillion

Quizplus · Accepted Answer

In the long-run equilibrium, the economy will adjust to the full-employment level of output where the aggregate demand curve intersects the long-run aggregate supply curve. The correct answer is C) 100; $18 trillion, as this represents the point where the economy is at its full employment output without changing the price level from the initial condition, assuming the aggregate demand remains constant.

-In the Above Figure, If Aggregate Demand Does Not Change