The expenditure line in the Keynesian cross diagram represents the:
A)equilibrium condition that Y = PAE.
B)relationship between planned expenditure and output.
C)relationship between consumption and after-tax disposable income.
D)equilibrium condition that Y = Y*.

Question

Quizplus · Accepted Answer

Looking at the axes of the Keynesian cross diagram, the horizontal axis is output and the vertical axis is planned aggregate expenditure (PAE ). The expenditure line shows the relationship between these two variables.

The Expenditure Line in the Keynesian Cross Diagram Represents The