The quantity of real GDP demanded on the AD curve is the equilibrium real GDP when
A)aggregate planned expenditure is greater than real GDP.
B)equilibrium expenditure is greater than real GDP.
C)aggregate planned expenditure equals real GDP.
D)aggregate planned expenditure is less than real GDP.
E)the price level equals the equilibrium price level.

Question

Quizplus · Accepted Answer

The AD curve represents the aggregate planned expenditure at each price level. At the equilibrium point on the AD curve, aggregate planned expenditure equals real GDP, meaning that the quantity of real GDP demanded is equal to the actual quantity produced in the economy.

The Quantity of Real GDP Demanded on the AD Curve