The aggregate expenditure line shows A. real GDP on the horizontal axis and aggregate expenditure on the vertical axis B. Aggregate expenditure on the horizontal axis and real GDP on the vertical axis C. consumption on the horizontal axis and aggregate expenditure on the vertical axis D. aggregate expenditure on the horizontal axis and consumption on the vertical axis E. investment on the horizontal and aggregate expenditure on the vertical axis.
Added by Stacy Y.
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Step 1: Identify the variables being compared in the aggregate expenditure line, which are real GDP and aggregate expenditure. Show more…
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At point $A$ in the following graph, is planned aggregate expenditure greater than, equal to, or less than GDP? What about at point $B$ ? At point $C$ ? For points $A$ and $C$, indicate the vertical distance that measures the unintended change in inventories.
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At point $A$ in the following graph, is planned aggregate expenditure greater than, equal to, or less than GDP? What about at point B? At point C? For points $A$ and $C$ , indicate the vertical distance that measures the unintended change in inventories.
The spreadsheet lists real GDP $(Y)$ and the components of aggregate planned expenditure in billions of dollars. $$\begin{array}{|c|c|c|c|c|c|c|c|} \hline & \mathrm{A} & \mathrm{B} & \mathrm{C} & \mathrm{D} & \mathrm{E} & \mathrm{F} & \mathrm{G} \\ \hline 1 & & \mathrm{Y} & \mathrm{C} & 1 & \mathrm{G} & \mathrm{X} & \mathrm{M} \\ \hline 2 & \mathrm{A} & 100 & 110 & 50 & 60 & 60 & 15 \\ \hline 3 & \mathrm{B} & 200 & 170 & 50 & 60 & 60 & 30 \\ \hline \mathbf{4} & \mathrm{C} & 300 & 230 & 50 & 60 & 60 & 45 \\ \hline 5 & \mathrm{D} & 400 & 290 & 50 & 60 & 60 & 60 \\ \hline 6 & E & 500 & 350 & 50 & 60 & 60 & 75 \\ \hline 7 & F & 600 & 410 & 50 & 60 & 60 & 90 \\ \hline \end{array}$$ a. What is aggregate planned expenditure when real GDP is $\$ 200$ billion? b. If real GDP is $\$ 200$ billion, explain the process that moves the economy toward equilibrium expenditure. c. If real GDP is $\$ 500$ billion, explain the process that moves the economy toward equilibrium expenditure.
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