Using the aggregate expenditure model, the equilibrium level of the aggregate expenditure can
Occur when the economy is producing
A)only at below full employment.
B)at either below full employment or at full employment but never at above full employment.
C)only at full employment.
D)only at above full employment.
E)at full employment, above full employment, or below full employment.

Question

Quizplus · Accepted Answer

The equilibrium level of aggregate expenditure can occur at any level of output: below, at, or above full employment, depending on the level of aggregate demand relative to the economy's potential output.

Using the Aggregate Expenditure Model, the Equilibrium Level of the Aggregate