When aggregate expenditure = GDP
A)macroeconomic equilibrium occurs.
B)the federal budget is balanced.
C)net exports equal zero.
D)saving equals zero.

Question

Quizplus · Accepted Answer

When aggregate expenditure equals GDP, it means that the economy is in equilibrium. This implies that the amount of goods and services produced (GDP) is equal to the total expenditure on those goods and services (aggregate expenditure). This is the point where the economy experiences neither a surplus nor a shortage of goods and services, and therefore it is referred to as macroeconomic equilibrium. The other options are not necessarily true when aggregate expenditure equals GDP.

When Aggregate Expenditure = GDP