According to mainstream economists, the basic determinant of real output, employment, and the price level is
A) information and people's expectations.
B) the level of aggregate expenditures.
C) the incentive to work, save, and invest.
D) the supply of money.

Question

Quizplus · Accepted Answer

Mainstream economists generally believe that the level of aggregate expenditure - the amount of spending on goods and services by households, businesses, and governments - is the primary driver of real output (i.e. GDP), employment, and the price level (i.e. inflation). An increase in aggregate expenditure will lead to higher GDP and employment, and potentially higher prices due to increased demand for goods and services. Similarly, a decrease in aggregate expenditure will lead to lower GDP and employment, and potentially lower prices due to decreased demand for goods and services.

According to Mainstream Economists, the Basic Determinant of Real Output