-Diagram 40a indicates that
A) equilibrium income is above full employment.
B) equilibrium income is below full employment.
C) equilibrium income is the same as full employment.
D) equilibrium income is the same as aggregate spending.

Question

-Diagram 40a indicates that
A) equilibrium income is above full employment. 
B) equilibrium income is below full employment. 
C) equilibrium income is the same as full employment. 
D) equilibrium income is the same as aggregate spending.

Quizplus · Accepted Answer

Equilibrium income below full employment suggests that the economy is not utilizing all its resources efficiently, leading to unemployment. This scenario is depicted when the equilibrium level of income/output is less than the full employment level of income/output.

-Diagram 40a Indicates That