Draw a graph of an economy's aggregate expenditure function. Using this graph, explain how equilibrium income is determined. Show graphically the effect on the equilibrium level of output if government spending and taxes are increased by the same amount. Explain why the balanced-budget multiplier equals 1.

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The Answer of Draw a graph of an economy's aggregate expenditure function. Using this graph, explain how equilibrium income is determined. Show graphically the effect on the equilibrium level of output if government spending and taxes are increased by the same amount. Explain why the balanced-budget multiplier equals 1.

Draw a Graph of an Economy's Aggregate Expenditure Function