CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

Refer to the graph below. The economy is in short-run equilibrium at ______.

A. point A
B. point B
C. point C
Correct Answer: A

Short-run equilibrium exists at the point at which the aggregate demand curve intersects the aggregate supply curve.

User Contributed Comments 4

User Comment
Cooltallgal At point C when it is in a long-run equilibrium where AD meets with Potential Output.
pierreE14 LR macro equilibrium: Real GPD = Potential GPD
thus we need the intersection of LAS, AD AND SAS

so the previous comment should be wrong,
can anyone confirm me ?
merci ;)
poojacfa Pierre, at point C, the economy is at a Long Run Eqm not Short Run. The Short Run Eqm is at point A. So, yes, u r right. :)
bobert LR Equilibrium occurs where LAS, AD, and SAS coincide. Is that point actually on this graph at all? I would guess not, seeing as there are only 2 curves intersecting at any of those points.
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