Equilibrium expenditure occurs when
A)disposable income equals consumption expenditures plus imports.
B)aggregate planned expenditure equals real GDP.
C)real GDP plus net taxes equals disposable income.
D)disposable income equals real GDP.
E)real GDP minus net taxes equals disposable income.

Question

Quizplus · Accepted Answer

Equilibrium expenditure occurs when aggregate planned expenditure equals real GDP, meaning that there is no unplanned inventory accumulation or depletion. In other words, the economy is producing and selling the same amount of goods and services that individuals and firms are willing to purchase at the given price level.

Equilibrium Expenditure Occurs When