The economy can be out of equilibrium even though total expenditures equal national income
A) because planned expenditure can be different from total expenditures.
B) because national income does not always equal real GDP.
C) the value of total sales does not always equal the value of total expenditures.
D) there is something wrong with the circular flow diagram.

Question

Quizplus · Accepted Answer

Planned expenditure refers to the amount households, businesses, and the government plan to spend in a given period, while total expenditures include actual spending. An economy can be out of equilibrium when planned expenditures do not match actual expenditures, even if total expenditures equal national income.

The Economy Can Be Out of Equilibrium Even Though Total