The equilibrium level of aggregate planned expenditure is found where
A) there is no saving and no dissaving.
B) the price level is rising at a constant rate.
C) autonomous expenditure equals equilibrium expenditure.
D) aggregate planned expenditure equals real GDP.
E) net exports is zero.

Question

Quizplus · Accepted Answer

The equilibrium level of aggregate planned expenditure is found where aggregate planned expenditure equals real GDP. This is because, at equilibrium, the total amount of goods and services produced (real GDP) is exactly equal to the total amount of goods and services that households, businesses, the government, and foreigners plan to buy.

The Equilibrium Level of Aggregate Planned Expenditure Is Found Where