On the 45 degree-line diagram,for points that lie below the 45 degree line
A)planned aggregate expenditure is greater than GDP.
B)planned aggregate expenditure is less than GDP.
C)planned aggregate expenditure is equal to GDP.
D)planned aggregate expenditure is less than aggregate income.

Question

Quizplus · Accepted Answer

The 45 degree line represents equality between planned aggregate expenditure and GDP. Points below the 45 degree line, therefore, represent situations where planned aggregate expenditure is less than GDP.

On the 45 Degree-Line Diagram,for Points That Lie Below the 45