Using the output at which the aggregate expenditure curve intersects the 45-degree line,we can identify
A)Equilibrium (macro)at the intersection point.
B)Dissaving to the right of the intersection point.
C)Full employment to the left of the intersection point if there is a recessionary gap.
D)A consumption shortfall at the intersection point.

Question

Quizplus · Accepted Answer

The intersection point between the aggregate expenditure curve and the 45-degree line represents the level of output where aggregate expenditure equals aggregate output (real GDP). This is the point of equilibrium in the macroeconomy.

Using the Output at Which the Aggregate Expenditure Curve Intersects