When the Economy Is Producing Real GDP at the Level

question 160

Multiple Choice

When the economy is producing Real GDP at the level at which the LRAS curve intersects the AD curve the economy is

• A) in a recessionary gap.
• B) in long-run equilibrium.
• C) in an inflationary gap.
• D) operating at less than full-employment output.

---

Definitions:

Unitary-elastic

A demand or supply situation where the percentage change in quantity demanded or supplied is exactly equal to the percentage change in price.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.

Profit

The financial gain made by a business when revenue exceeds expenses.

Relationship

A connection, association, or involvement between two or more parties, often referring to interpersonal or business contexts.