Equilibrium in the goods market occurs where
A) real GDP equals nominal GDP.
B) aggregate expenditure equals autonomous consumption.
C) autonomous consumption equals induced consumption.
D) aggregate expenditure equals real GDP.

Question

Quizplus · Accepted Answer

Equilibrium in the goods market occurs where aggregate expenditure equals real GDP. This is where planned aggregate expenditure (which includes both autonomous consumption and induced consumption) equals the actual level of output in the economy, which is measured by real GDP. Therefore, choice D is the correct answer.

Equilibrium in the Goods Market Occurs Where