9) Macroeconomic balance in the long term when A) The aggregate demand curve int

Question

9) Macroeconomic balance in the long term when

A) The aggregate demand curve intersects the short-term aggregate supply curve

B) The aggregate demand curve intersects the long-term aggregate supply curve

C) The short-term aggregate supply curve intersects the long-term aggregate supply curve

D) The aggregate demand curve intersects the short-term aggregate supply curve at a point on the long-term aggregate supply curve

10) In the short term, the overall supply decreases with total demand remaining stable

A) Lower both real output and general price level

B) The decline in real output and the increase in the general price level

C) Increase both the real output and the general price level

D) Increase real output and decrease the general level of prices

Explanation / Answer

Ans

D is right. Here both long run Aggregate supply curve, SRAS and AD meet

2 The price level will rise but output fall. So b is right answer

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