Use the following to answer questions:
Figure: Short- and Long-Run Equilibrium II 
-(Figure: Short- and Long-Run Equilibrium II) Look at the figure Short- and Long-Run Equilibrium II. If the economy is at equilibrium at E1, it is in a(n) :
Definitions:
Compounded Annually
The method of calculating interest where the total interest is added to the principal once per year, resulting in interest earning interest annually.
Perpetuity
A type of annuity that pays a fixed sum of money to an individual indefinitely.
Compounded Quarterly
Compounded Quarterly is a method of calculating interest where the interest earned over a quarter is added to the principal, and the subsequent interest calculation will include the previously earned interest.
Deferral Period
A span of time during which payments, especially loan or insurance premiums, are postponed.
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