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This study guide covers the Aggregate Demand-Aggregate Supply (AD-AS) model, focusing on short-run and long-run equilibrium. It explains inflationary and recessionary gaps, including their characteristics and graphical representations. The guide also touches on policy options for correcting these gaps and provides practice questions and exam tips.
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Question 1 of 12
Alright, future AP Macro whiz! 🧙♀️ Where does the magic happen in the short-run aggregate equilibrium?
AD intersects with LRAS
AD intersects with SRAS
SRAS intersects with LRAS
AD, SRAS, and LRAS all intersect