Consider the following information describing a closed economy with no government.Aggregate output is demand determined and the price level is constant. TABLE 21-6
-Refer to Table 21-6.This economy's equilibrium level of national income is
A)500.
B)600.
C)750.
D)1000.
E)1500.

Question

Consider the following information describing a closed economy with no government.Aggregate output is demand determined and the price level is constant.  TABLE 21-6
-Refer to Table 21-6.This economy's equilibrium level of national income is
A)500. 
B)600. 
C)750. 
D)1000. 
E)1500.

Quizplus · Accepted Answer

The equilibrium level of national income can be found where aggregate expenditure (AE) equals aggregate output (Y). In this case, at a price level of 100, AE is equal to 750 at both the 400 and 500 levels of output, but AE is greater than output at the 300 level and less than output at the 600 and 700 levels. Therefore, the equilibrium level of national income is 750 at a price level of 100.

Consider the Following Information Describing a Closed Economy with No