Long-run macroeconomic equilibrium occurs when
A) real GDP is equal to potential GDP.
B) real GDP is at a point along the short-run aggregate supply curve.
C) the unemployment rate is zero.
D) all able-bodied adults have jobs.

Question

Quizplus · Accepted Answer

Long-run macroeconomic equilibrium occurs when real GDP is equal to potential GDP, as this indicates that the economy is producing at its maximum sustainable level without causing inflationary pressures or causing a recession. Choices B, C, and D are incorrect as they do not accurately reflect the concept of long-run macroeconomic equilibrium.

Long-Run Macroeconomic Equilibrium Occurs When