The figure below depicts the aggregate demand and goods market equilibrium. Which of the following statements are correct?

Question

Accepted Answer

At
point C, output is lower than aggregate demand.

Accepted Answer

When aggregate demand for output is equal to the quantity of output being produced, the economy is in equilibrium. The 45-degree line shows all the points where
the economy is in equilibrium.

Accepted Answer

Changes in inventories in this model are used to equalize output and aggregate demand in the short run.

Answer

At point C, firms are increasing their stocks of unsold inventories. This would send a message that they should decrease production.

Crowdly

The figure below depicts the aggregate demand and goods market equilibrium. Whic...

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