At the equilibrium expenditure
A) purchasers are willing to buy exactly the amount of real GDP that is produced.
B) purchasers will be prone to bid up prices.
C) there can be unplanned inventory accumulation.
D) an increase in desired expenditure cannot increase the level of real GDP.

Question

Quizplus · Accepted Answer

At the equilibrium expenditure, purchasers are willing to buy exactly the amount of real GDP that is produced. This is because the equilibrium expenditure represents the point where the aggregate demand for goods and services in the economy is equal to the aggregate supply of goods and services. As a result, the quantity of goods and services demanded by purchasers matches the quantity of goods and services produced by firms, leading to no unplanned inventory accumulation. Additionally, at the equilibrium expenditure, there is no pressure for prices to increase as there is no excess demand or excess supply.

At the Equilibrium Expenditure