The aggregate output demanded for a given price level occurs at the point where:
A)an economy reaches the full employment of labor.
B)aggregate expenditure equals real GDP.
C)actual aggregate expenditures exceeds real GDP.
D)inventories of goods and services are increasing.
E)inventories of goods and services are decreasing.

Question

Quizplus · Accepted Answer

This is called the equilibrium level of output, where the aggregate expenditure (the total demand for goods and services) is equal to the real GDP (the total supply of goods and services). At this point, there is no unplanned change in inventories, as businesses are supplying exactly what consumers are demanding.

The Aggregate Output Demanded for a Given Price Level Occurs