Equilibrium levels of real national output

Cards (3)

  • When is the equilibrium reached in macroeconomics?
    When the AD curve intersects with the AS curve
  • What would happen if the price level was above the equilibrium point?
    The price level would decrease, because AS would be greater than AD
  • What would happen if the price level was below the equilibrium point?
    The price level would increase, because AS would be lesser than AD