Graphically, Long-Run Equilibrium Occurs at the Intersection of the Aggregate

question 46

Multiple Choice

Graphically, long-run equilibrium occurs at the intersection of the aggregate demand curve and:

• A)the aggregate supply curve and potential output.
• B)the planned aggregate expenditure line.
• C)the aggregate supply curve.
• D)potential output.

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Definitions:

Returns

The profit or loss on an investment over a specified period of time, often expressed as a percentage of the investment's initial cost.

Market Risk Premium

The additional return expected by investors for taking on the higher risk of investing in the stock market over risk-free securities.

Dividend

A part of a company's profits distributed to its shareholders, typically every three months.

Required Return

The minimum expected rate of return on an investment necessary to compensate for the risk of the investment.