In the Keynesian cross diagram, the ________ line shows the relationship between planned aggregate expenditure and output, and the ________ line represents the condition that planned aggregate expenditure and output are equal.
A)consumption function; 45-degree
B)45-degree; consumption function
C)expenditure; 45-degree
D)45 degree; expenditure

Question

Quizplus · Accepted Answer

The expenditure line relates planned aggregate expenditure to output by definition. The 45-degree line is the set of points showing equality between planned aggregate expenditure and output.

In the Keynesian Cross Diagram, the ________ Line Shows the Relationship