Exhibit 10A-1 Aggregate demand and supply model

Based on Exhibit 10A-1, when the aggregate demand curve shifts to the position AD₂ and the economy is operating at point E₂, the economy's position of long-run equilibrium corresponds to point:

Question

Exhibit 10A-1 Aggregate demand and supply model

Based on Exhibit 10A-1, when the aggregate demand curve shifts to the position AD₂ and the economy is operating at point E₂, the economy's position of long-run equilibrium corresponds to point:

Quizplus · Accepted Answer

At long-run equilibrium, the economy produces at potential GDP (Y*) and the LRAS curve intersects the aggregate demand curve at the same point as the short-run aggregate supply curve. In this scenario, point E₃ represents the intersection of LRAS and AD₂, indicating the long-run equilibrium position.

​ Exhibit 10A-1 Aggregate Demand and Supply Model

Exhibit 10A-1 Aggregate Demand and Supply Model