Refer to the diagram. If aggregate expenditures in this economy are ( $\left( C + I _ { g } + X _ { n 2 } \right)$ ), then the equilibrium
Levels of GDP and aggregate expenditures will be
A) 0A and 0E, respectively.
B) 0B and 0F, respectively.
C) 0A and AH, respectively.
D) 0D and DJ, respectively.

Question

Refer to the diagram. If aggregate expenditures in this economy are ( $\left( C + I _ { g } + X _ { n 2 } \right)$ ), then the equilibrium
Levels of GDP and aggregate expenditures will be
A) 0A and 0E, respectively. 
B) 0B and 0F, respectively. 
C) 0A and AH, respectively. 
D) 0D and DJ, respectively.

Quizplus · Accepted Answer

When aggregate expenditures are equal to 0D, the equilibrium level of GDP will be DJ where the 45-degree line intersects the aggregate expenditures curve. This is the point where desired spending is equal to actual output, resulting in no unplanned inventory changes. Therefore, choice D is the correct answer.

Refer to the Diagram (C+Ig+Xn2)\left( C + I _ { g } + X _ { n 2 } \right)(C+Ig​+Xn2​)

Refer to the Diagram $\left( C + I _ { g } + X _ { n 2 } \right)$