Data on output and planned aggregate expenditure in Macroland are given below. $$\begin{array} { c c }
& \underline{ \text { Planned Aggregate } } \
\underline{\text { Output (Y) }} & \underline{ \text { Expenditure (PAE) } } \
2,000 & 2,300 \
3,000 & 3,200 \
4,000 & 4,100 \
5,000 & 5,000 \
6,000 & 5,900
\end{array}$$
Based on these data,the short-run equilibrium level of output is _____.
A)2,000
B)3,200
C)4,100
D)5,000

Question

Data on output and planned aggregate expenditure in Macroland are given below. $$\begin{array} { c c } 
&  \underline{ \text { Planned Aggregate } } \
 \underline{\text { Output (Y) }} &  \underline{ \text { Expenditure (PAE) } } \
 2,000 & 2,300 \
3,000 & 3,200 \
4,000 & 4,100 \
5,000 & 5,000 \
6,000 & 5,900
\end{array}$$
Based on these data,the short-run equilibrium level of output is _____.
A)2,000
B)3,200
C)4,100
D)5,000

Quizplus · Accepted Answer

Short-run equilibrium output is where planned aggregate expenditure (PAE) equals actual output (Y). Looking at the data, it can be observed that at output level of 5,000, PAE is also equal to 5,000. This indicates that the economy is in equilibrium at this level of output. Hence, the answer is D)5,000.

Data on Output and Planned Aggregate Expenditure in Macroland Are