The economy's long-run equilibrium is at the point where the aggregate demand curve intersects the long-run...
The economy's long-run equilibrium is at the point where the aggregate demand curve intersects the long-run aggregate supply curve.
True
False
The aggregate supply curve shows the relationship between real GDP and the average price level.
True
False
Homework Answers
Solution 1
Answer is True.
Because long run equilibrium can only occur at point where aggregate demand interesect either LRAS or SRAS.
Solution 2
True
Because aggregate supply broadly is responsible in changing real GDP and Price Level in market and hence the correlation exists.
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