In the Short Run, the Equilibrium Price Level and the Equilibrium

question 117

Multiple Choice

In the short run, the equilibrium price level and the equilibrium level of total output are determined by the intersection of

• A) the aggregate demand, the short-run aggregate supply and the long-run aggregate supply curves.
• B) the short-run aggregate supply and the long-run aggregate supply curves.
• C) the aggregate demand and the short-run aggregate supply curves.
• D) the aggregate demand and the long-run aggregate supply curves.

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Definitions:

Income Increase

A rise in the amount of money earned by a person, group, or country, which can affect purchasing power and consumption patterns.

Substitute Good

A product or service that a consumer sees as the same or similar to another product.

Price

The cost associated with obtaining a good or service.

Market Quantity

The total amount of a product or service that is available for purchase at any given time in a market.