In the self-correcting AD-AS model, a point where the economy's long-run AS curve, short-run AS curve, and AD curve all intersect at a single point represents a point where:
A) real GDP is equal to its full-employment level.
B) the conditions of short-run equilibrium are fulfilled.
C) the conditions of long-run equilibrium are fulfilled.
D) all of the above.
E) a and c, but not b.

Question

Quizplus · Accepted Answer

The self-correcting AD-AS model shows how the economy moves towards long-run equilibrium. At the point where the long-run AS curve, short-run AS curve, and AD curve all intersect, the economy is at its full-employment level of output and the conditions of both short-run and long-run equilibrium are fulfilled.

In the Self-Correcting AD-AS Model, a Point Where the Economy's