The level of aggregate output and income where there is a balance between spending and production decisions and where the economy moves toward is called:
A)disequilibrium level of output and income.
B)equilibrium level of output and income.
C)disequilibrium level of employment.
D)none of the above.

Question

Quizplus · Accepted Answer

The equilibrium level of output and income is where the total spending in the economy is equal to the total production, leading to no excess or shortage of goods and services. At this level, there is no further tendency for the economy to move towards disequilibrium, hence making option A incorrect. Option C is irrelevant as it refers to employment and not output and income. Option D is incorrect as one of the options must be correct, as stated in the question.

The Level of Aggregate Output and Income Where There Is