Question

13. The point where the aggregate demand
and the aggregate supply curves intersect
is called
a. total demand
O b. effective demand
c. equilibrium demand
O d. All of the above

Answer 1

Answer:

The point where the aggregate demand

and the aggregate supply curves intersect

is called effective demand।

Explanation:

Aggregate supply refers to the desired level of output in the economy during an accounting year. It is through this output only that the producer sector generates income.

Aggregate Demand refers to the desired level of expenditure in the economy during an accounting year. It is what people wish to spend on the purchase of goods and services during an accounting year.

Therefore, the point of intersection between aggregate demand curve and aggregate supply curve is called effective demand as at this point all the output produced in the economy is used by the consumers of the economy owing to full employment.