When SRAS and AD Intersect at the Natural Level of Real

question 12

Multiple Choice

When SRAS and AD intersect at the natural level of real output,is the economy in equilibrium?

• A)It is not necessarily in either short-run equilibrium or in long-run equilibrium.
• B)It is in short-run equilibrium and long-run equilibrium.
• C)It is in short-run equilibrium but not necessarily in long-run equilibrium.
• D)It is in long-run equilibrium but not necessarily in long-run equilibrium.ANS B

---

Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually pay.

Marginal Cost

The financial outlay required to produce a further unit of a product or service.

Pollution Abatement

Actions taken to reduce, control, or eliminate pollution from sources in order to protect the environment.

Marginal Utility

The supplementary utility or enjoyment obtained by consuming an additional unit of a good or service.