Step 1: States of the Economy The following graph shows the aggregate demand curve (AD), the short-run aggregate supply curve (SR.AS), and the long-run aggregate supply curve (LRAS) of an economy. (? Real GDP and Natural Real GDP 200 LRAS 180 160 AD 140 120 100 PRICE LEVEL 80 50 40 SRAS 20 2 3 5 6 8 9 10 REAL GDP (Trillions of dollars) The short-run equilibrium output level is , and the economy is operating . As a result, exists in the labor market of this economy.