The Intersection of the Economy's Aggregate Demand and Long-Run Aggregate

question 27

Multiple Choice

The intersection of the economy's aggregate demand and long-run aggregate supply curves
I. determines its equilibrium real GDP in both the long run and the short run.
II. determines its equilibrium price level in both the long run and the short run.
III. occurs at the economy's potential output.

• A) I, II, and III
• B) I and III only
• C) II and III only
• D) III only

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Definitions:

Period-to-period Statements

Comparative financial reports that show changes in a company's financial position over successive periods.

Revenue Trend Percent

A metric that measures the rate of change in a company's revenue over a specific period, helping to understand growth patterns.

Base Year

A specific year against which economic or financial data is compared over a period of time.

Sales

The exchange of goods or services for money, measuring the primary revenue-generating activities of a business.