-In the Aggregate Demand - Aggregate Supply diagram in Figure 8.1, Box 5 should be filled with
A)PI* for macroeconomic equilibrium Price Index.
B)RGDP* for macroeconomic equilibrium Real Gross Domestic Product.
C)AS for Aggregate Supply.
D)AD for Aggregate Demand.

Question

-In the Aggregate Demand - Aggregate Supply diagram in Figure 8.1, Box 5 should be filled with 
A)PI* for macroeconomic equilibrium Price Index. 
B)RGDP* for macroeconomic equilibrium Real Gross Domestic Product. 
C)AS for Aggregate Supply. 
D)AD for Aggregate Demand.

Quizplus · Accepted Answer

In the Aggregate Demand - Aggregate Supply (AD-AS) model, Box 5, which is located at the intersection of the AD and AS curves, represents the point of macroeconomic equilibrium. At this point, the equilibrium Real Gross Domestic Product (RGDP*) is determined, indicating the level of economic output at which the quantity of goods and services demanded equals the quantity supplied at the prevailing price level.

-In the Aggregate Demand - Aggregate Supply Diagram in Figure