When aggregate expenditures are equal to aggregate production,the economy is experiencing

Question

Quizplus · Accepted Answer

When aggregate expenditures (total spending in the economy) are equal to aggregate production (total output in the economy), the economy is said to be in macroeconomic equilibrium. This means that there is no inflationary or recessionary gap and the economy is producing at its potential level (also known as the full employment level). A budget deficit and a trade deficit are not directly related to the level of aggregate production and expenditure in the economy.

When Aggregate Expenditures Are Equal to Aggregate Production,the Economy Is