If the economy is simultaneously in long-run and short-run equilibrium, which of the following is true?
a. Aggregate quantity supplied is greater than potential output.
b. Aggregate quantity demanded is less than potential output.
c. Aggregate quantity demanded is equal to potential output.
d. The aggregate demand curve is horizontal at the potential output level.
C
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Which of the following occurs while moving along a short-run aggregate supply curve?
A) The money wage rate and the price level change by the same percentage. B) The money wage rate changes and the price level is constant. C) The price level changes and the money wage rate is constant. D) Neither the price level nor the money wage rate changes.
Planned investment expenditures will eventually decrease after: a. the money supply decreases
b. the demand for money decreases. c. the interest rate falls. d. the Fed buys government securities. e. business managers become more optimistic about future market conditions for their products.