The equilibrium illustration consists of the aggregate demand curve, labeled AD, which slopes from the upper left to the lower right, and the aggregate supply curve, labeled AS, which slopes from the origin of the X and Y axes to the upper right. The AD curve and AS curve intersect at what is known as the equilibrium point indicating that total demand matches total supply. The equilibrium point is connected to the vertical price axis by a horizontal line and is labeled on the x axis as price level equilibrium or PLe. The equilibrium point is connected to the real GDP Y axis by a vertical line. This quantity equilibrium point is labeled as Qe on the Y axis.
