- CFA Exams
- CFA Exam: Level I 2021
- Study Session 4. Economics (1)
- Reading 14. Aggregate Output, Prices, and Economic Growth
- Subject 6. Equilibrium GDP and Prices
CFA Practice Question
Refer to the graph below. The economy is in short-run equilibrium at ______.
B. point B
C. point C
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. |