On the 45 degree line-diagram,for points that lie above 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

For points that lie above the 45-degree line on such a diagram, planned aggregate expenditure is greater than GDP. This is because the 45-degree line represents points where planned aggregate expenditure equals GDP, so any point above this line indicates a higher planned expenditure than the current GDP.

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