Asked by Manal Al-Hashmi on Jun 23, 2024
Verified
Refer to Figure 33-3. In Figure 33-3, Point B represents a
A) short-run equilibrium and a long-run equilibrium.
B) short-run equilibrium, and Point A represents a long-run equilibrium.
C) long-run equilibrium, and Point A represents a short-run equilibrium.
D) long-run equilibrium, and Point C represents a short-run equilibrium.
Short-Run Equilibrium
A state in which market supply equals market demand at a particular price level, but where all factors of production and costs are not fully adjustable.
Long-Run Equilibrium
A state in which economic forces such as supply and demand are balanced and in the absence of external influences the values of economic variables will not change.
- Assess the impact of variations in total demand and total supply on the economic progression towards a state of long-term stability.
Verified Answer
SK
Sunny KaushalJun 23, 2024
Final Answer :
B
Explanation :
Point B represents a short-run equilibrium where the economy might be at any given time, while Point A represents a long-run equilibrium where the economy tends to move over time, reflecting the intersection of the long-run aggregate supply with the aggregate demand.
Learning Objectives
- Assess the impact of variations in total demand and total supply on the economic progression towards a state of long-term stability.