The following figure illustrates the Keynesian model of equilibrium in the macroeconomy.

-Equilibrium will occur in this economy at an output level of:
A) $0.
B) $2 trillion.
C) $5 trillion.
D) $0 and $5 trillion.

Question

The following figure illustrates the Keynesian model of equilibrium in the macroeconomy.
 
-Equilibrium will occur in this economy at an output level of:
A) $0. 
B) $2 trillion. 
C) $5 trillion. 
D) $0 and $5 trillion.

Quizplus · Accepted Answer

Equilibrium in an economy occurs where aggregate demand equals aggregate supply. The question implies that this condition is met at an output level of $5 trillion.

The Following Figure Illustrates the Keynesian Model of Equilibrium in the Macroeconomy