AP Macroeconomics Practice Quiz: Equilibrium in the Aggregate Demand-Aggregate Supply (AD-AS) Model
Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026
Test your understanding with short quizzes. This quiz has 10 questions to check your progress.
Question 1 of 10
All Questions (10)
A) The intersection of the Aggregate Demand (AD) and Long-Run Aggregate Supply (LRAS) curves.
B) The intersection of the Aggregate Demand (AD) and Short-Run Aggregate Supply (SRAS) curves.
C) The point where the economy is at the full-employment level of real output.
D) The intersection of the Short-Run Aggregate Supply (SRAS) and Long-Run Aggregate Supply (LRAS) curves.
Correct Answer: B
According to the provided content, short-run equilibrium occurs when the aggregate quantity of output demanded and the aggregate quantity of output supplied are equal, which is represented graphically by the intersection of the AD and SRAS curves.
A) The short-run equilibrium output is greater than the full-employment output.
B) The Aggregate Demand (AD) curve intersects the Short-Run Aggregate Supply (SRAS) curve.
C) The short-run equilibrium occurs at the full-employment level of real output.
D) The aggregate quantity of output demanded is greater than the aggregate quantity of output supplied.
Correct Answer: C
Long-run equilibrium occurs when the AD and SRAS curves intersect on the LRAS curve. The LRAS curve represents the full-employment level of real output, so the short-run equilibrium must be at this level for the economy to be in long-run equilibrium.
A) The intersection of the AD and SRAS curves occurs to the right of the LRAS curve.
B) The short-run equilibrium output is below the full-employment level of output.
C) The AD, SRAS, and LRAS curves all intersect at the same point.
D) The short-run equilibrium output is equal to the full-employment level of output.
Correct Answer: B
The provided text states that a negative (i.e., recessionary) output gap is created when the short-run equilibrium output is below the full-employment level of output.
A) The short-run equilibrium output is less than the full-employment level of output.
B) The AD and SRAS curves intersect on the LRAS curve.
C) The short-run equilibrium output is above the full-employment level of output.
D) The economy is operating on its Long-Run Aggregate Supply curve.
Correct Answer: C
The content specifies that a positive (i.e., inflationary) output gap occurs when the short-run equilibrium output is above the full-employment level of output.
A) The economy is experiencing a recessionary gap.
B) The economy is experiencing an inflationary gap.
C) The economy is in long-run equilibrium.
D) The aggregate demand is less than the short-run aggregate supply.
Correct Answer: C
Long-run equilibrium is defined as the point where the short-run equilibrium occurs at the full-employment level of real output. Therefore, if the current short-run output is at the full-employment level, the economy is in long-run equilibrium.
A) The AD and SRAS curves intersect at the same point as the LRAS curve.
B) The point of intersection for the AD and SRAS curves is at a lower real output level than that indicated by the LRAS curve.
C) The point of intersection for the AD and SRAS curves is at a higher real output level than that indicated by the LRAS curve.
D) The AD curve shifts to the left, intersecting the SRAS curve at a lower price level.
Correct Answer: C
A positive, or inflationary, output gap occurs when the short-run equilibrium output is above the full-employment level. Graphically, this means the AD and SRAS curves intersect to the right of the vertical LRAS curve, indicating a higher level of real output.
A) the aggregate demand equals short-run aggregate supply.
B) the price level is stable or changing.
C) the short-run equilibrium output is also on the long-run aggregate supply curve.
D) there is any unemployment in the economy.
Correct Answer: C
In both equilibriums, AD equals SRAS. However, long-run equilibrium has the additional condition that this intersection point must lie on the LRAS curve, signifying the economy is at its full-employment output level.
A) The aggregate quantity of output demanded equals the aggregate quantity of output supplied.
B) The AD and SRAS curves intersect on the LRAS curve.
C) The economy is operating at its full-employment level of real output.
D) The short-run equilibrium output is creating a positive output gap.
Correct Answer: D
By definition, in long-run equilibrium, the short-run equilibrium output is exactly at the full-employment level. This means there is no output gap (neither positive nor negative). A positive output gap would imply the economy is in a short-run equilibrium above full employment.
A) the AD and SRAS curves do not intersect.
B) the short-run equilibrium output level differs from the full-employment output level.
C) the price level is equal to the expected price level.
D) the LRAS curve is horizontal.
Correct Answer: B
Short-run equilibrium is simply where AD intersects SRAS. Long-run equilibrium requires this intersection to occur at the full-employment output (on the LRAS). Therefore, if the short-run equilibrium output is above or below the full-employment level (creating an output gap), the economy is in short-run but not long-run equilibrium.
A) the current price level and the long-run equilibrium price level.
B) the short-run equilibrium output and the full-employment level of output.
C) the quantity of goods demanded and the quantity of goods supplied at the current price level.
D) the actual unemployment rate and the natural rate of unemployment.
Correct Answer: B
The provided content defines output gaps (both positive/inflationary and negative/recessionary) as situations where the short-run equilibrium output is either above or below the full-employment level of output.