Equilibrium expenditure is the level of expenditure at which
A)aggregate planned expenditure plus planned changes in inventories equals real GDP.
B)firms' inventories are zero.
C)firms' inventories are at the desired level.
D)aggregate planned expenditure minus planned changes in inventories equals real GDP.
E)firms produce more output than they sell.

Question

Quizplus · Accepted Answer

Equilibrium expenditure occurs when aggregate planned expenditure equals real GDP, meaning firms' inventories are at the desired level, with no unplanned changes.

Equilibrium Expenditure Is the Level of Expenditure at Which