Question

Use the drop-down menus to complete the statements.

Aggregate supply and aggregate demand are similar to supply and demand in that prices must reach
to benefit both producers and consumers.

When long-run equilibrium is achieved, a society is using its resources
.

Short-term aggregate supply happens in a curve instead of a straight line, because economic changes .

Answer 1

Aggregate supply and aggregate demand are similar to supply and demand in that prices must reach equilibrium to benefit both producers and consumers.

When long-run equilibrium is achieved, a society is using its resources efficiently (at full employment/potential output).

Short-term aggregate supply happens in a curve instead of a straight line, because economic changes do not immediately affect wages and prices (i.e., prices/wages are sticky).