Question

The equilibrium level of income/output is established when ______

Options

• AS = AD

• C = I

• S = Y

• None of the above.

Answer 1

The equilibrium level of income/output is established when AS = AD.

Explanation:

In an economy, equilibrium output refers to a situation in which: AS = AD

So that all of the producers who want to produce during the year are exactly equal to all of the buyers who want to spend on goods and services during the year.