At equilibrium expenditure
A) consumers' expenditures on goods and services equal firms' purchases of investment goods.
B) aggregate planned expenditure equals real GDP minus net exports.
C) aggregate planned expenditure equals real GDP.
D) firms hold no inventories of raw materials or final goods.

Question

Quizplus · Accepted Answer

At equilibrium expenditure, aggregate planned expenditure equals real GDP. This means that the total amount of goods and services that consumers, firms, and the government are willing to buy equals the total output of goods and services produced in the economy. At this point, the economy is neither in a state of surplus nor a state of shortage.

At Equilibrium Expenditure