GDP is at the equilibrium level when
A) total intended household spending equals business spending.
B) it is at full-employment level.
C) the rate of inflation equals the rate of unemployment.
D) any further increases in intended spending increase the price level.
E) it equals the amount of intended spending.

Question

Quizplus · Accepted Answer

GDP is at the equilibrium level when the total output (GDP) equals the total intended (planned) spending in the economy. This means that all goods produced are being purchased, and there is no unintended accumulation or depletion of inventories, indicating a balance between supply and demand at the current price level.

GDP Is at the Equilibrium Level When