When aggregate expenditure = GDP
A)macroeconomic equilibrium occurs.
B)the federal budget is balanced.
C)net exports equal zero.
D)saving equals zero.
E)the economy is operating at the ideal level.

Question

Quizplus · Accepted Answer

When aggregate expenditure (AE) equals GDP, it means that the total spending in the economy is equal to its total output. This is also known as macroeconomic equilibrium, where there is no unplanned inventory accumulation or depletion, and there is no pressure for output or price changes. Hence, A is the correct answer. B, C, D, and E are incorrect, as they are not necessarily true or relevant when AE equals GDP.

When Aggregate Expenditure = GDP