The combination of price level and real output that is compatible with both aggregate demand and aggregate supply is the definition of
A)Full-employment GDP.
B)Disposable income.
C)Macro equilibrium.
D)Real expenditures.

Question

Quizplus · Accepted Answer

The combination of price level and real output that is compatible with both aggregate demand and aggregate supply is known as macro equilibrium. Option A is incorrect because full-employment GDP refers to the level of real GDP at which the economy is at full employment. Option B is incorrect because disposable income refers to the amount of income that households have available for spending and saving after taxes have been paid. Option D is incorrect because real expenditures refer to the amount of expenditures adjusted for inflation.

The Combination of Price Level and Real Output That Is