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.
E)planned aggregate expenditure is greater than potential GDP.

Question

Quizplus · Accepted Answer

Points above the 45-degree line on such a diagram indicate that planned aggregate expenditure exceeds GDP, as the 45-degree line itself represents points where planned aggregate expenditure equals GDP.

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