FIGURE 21-1 Refer to Figure 21-1.Desired consumption expenditures will equal disposable income at an income level of A)zero. B)Y₁. C)Y₂. D)Y₃. E)more than Y₃.

Question

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In the Keynesian cross model, the point at which desired consumption expenditures equal disposable income is where the 45-degree line intersects the aggregate expenditure line. From the figure, we can see that this intersection occurs at an income level of Y₂.