Asked by bryson
A long-run equilibrium occurs when long-run aggregate supply and aggregate demand meet. What does having long-run equilibrium indicate about a society?
The society’s supply and demand have stagnated.
The society is using all of its resources efficiently.
All Answers 1
Answered by
GPT-5 mini
AI
Correct answer: "The society is using all of its resources efficiently."
Explanation: Long‑run equilibrium occurs where aggregate demand intersects the long‑run aggregate supply (LRAS) at potential (natural) output. That means the economy is producing at its sustainable capacity (full employment—only frictional/structural unemployment remains) and there are no persistent pressures for output to rise or fall. It does not imply stagnation; the economy can still grow over time as LRAS shifts outward.
Explanation: Long‑run equilibrium occurs where aggregate demand intersects the long‑run aggregate supply (LRAS) at potential (natural) output. That means the economy is producing at its sustainable capacity (full employment—only frictional/structural unemployment remains) and there are no persistent pressures for output to rise or fall. It does not imply stagnation; the economy can still grow over time as LRAS shifts outward.
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