The equilibrium GDP in a private sector closed model is the level of output:
A) where consumption equals saving.
B) where actual investment equals consumption.
C) where planned expenditure by households and business equals output
D) where full employment exists.

Question

Quizplus · Accepted Answer

The equilibrium GDP in a private sector closed model is the level of output where planned expenditure by households and businesses equals output. This is because, at equilibrium, all the goods produced are purchased, meaning there is no unplanned inventory accumulation or depletion.

The Equilibrium GDP in a Private Sector Closed Model Is