Which of the following is true at the equilibrium level of income?

Question

Quizplus · Accepted Answer

At the equilibrium level of income, aggregate expenditures (which includes consumption, investment, government spending, and net exports) are equal to real GDP. This is because producers will only supply as much output as is demanded by consumers, which will result in no unplanned inventory changes. In addition, autonomous consumption spending may not necessarily equal induced consumption spending as it depends on the level of disposable income, but this does not affect the equilibrium level of income. Unplanned investment spending may be positive or negative, but this will cause a shift in the aggregate expenditures curve rather than affecting the equilibrium level of income.

Which of the Following Is True at the Equilibrium Level