Exhibit 10.7 -Refer to Exhibit 10.7, Which Shows the Equilibrium Price Level

Multiple Choice

Exhibit 10.7

-Refer to Exhibit 10.7, which shows the equilibrium price level and real GDP in an aggregate demand-aggregate supply model. If prices are as expected at 130, then point Z is _____

A) a short-run and a long-run equilibrium.
B) a short-run equilibrium only.
C) a long-run equilibrium only.
D) neither a short-run nor a long-run equilibrium.
E) a medium-run equilibrium.