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The point where supply and demand intersect is the equilibrium point. This is the point where quantity demanded and quantity supplied are equal. The point where supply and demand intersect is the equilibrium point. This is the point where quantity demanded and quantity supplied are equal.
Finally, our macroeconomic equilibrium is determined by the intersection of aggregate demand and supply. As Figure 7-6 shows, Po is the price level at equilibrium. In a macroeconomic context, the price level can be used to indicate relative rates of inflation.