The level of output determined by the intersection of the short-run aggregate supply curve and the aggregate demand curve
A) is always below full-employment output.
B) is always above full-employment output.
C) always corresponds to full-employment output.
D) may be above, below, or equal to full-employment output.

Question

Quizplus · Accepted Answer

The level of output determined by the intersection of the short-run aggregate supply curve and the aggregate demand curve may be above, below, or equal to full-employment output depending on the economic conditions.

The Level of Output Determined by the Intersection of the Short-Run