Question

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.The society’s needs are being fully met.The society is not using all of its resources effectively.

Answer 1

The correct answer is the second option - The society is making use of all its resources efficiently.

Macro equilibrium or long-run equilibrium is an equilibrium which depicts the long-term economy of a state or country. The long-run aggregate supply is the production level of the economy (RGDP) when all the available resources have been used up efficiently.

In the long run, the economic ability of a state to produce the goods and the services that are able to meet the demand is typically based on the state of technology for the production and also availability and quality of the products.