In the self-correcting AD-AS model, the economy's short-run equilibrium position is indicated by the intersection of which two curves?
A) Short-run aggregate supply and long-run aggregate supply.
B) Short-run aggregate supply and aggregate demand.
C) Long-run aggregate supply and aggregate demand.
D) Long-run aggregate demand and short-run personal consumption expenditures curve.
E) Short-run aggregate demand and long-run personal consumption expenditures curve.

Question

Quizplus · Accepted Answer

In the self-correcting AD-AS model, the economy's short-run equilibrium position is indicated by the intersection of the short-run aggregate supply (SRAS) curve and the aggregate demand (AD) curve. This intersection represents the point at which the quantity of goods and services supplied in the short run equals the quantity demanded, determining the price level and output level in the short run.

In the Self-Correcting AD-AS Model, the Economy's Short-Run Equilibrium Position