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The table shows that equilibrium occurs where national income equals aggregate expenditure at $500. Since T is 0.2 of national income, substitute T with 0.2 Y so that: Solve for Y. Step 12. Answer this question: Why is a national income of $300 not an equilibrium? At national income of $300, aggregate expenditures are $388. Step 13.
The change in the equilibrium level of income in the aggregate expenditures model (remember that the model assumes a constant price level) equals the change in autonomous aggregate expenditures times the multiplier. Thus, the greater the multiplier, the greater will be the impact on income of a change in autonomous aggregate expenditures.
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Macro equilibrium in the income-expenditure model is found at the point where the level of GDP, or national income, equals aggregate expenditure. Graphically, this is easy to see as a point along the line that evenly divides the two axis on the graph.
Answer this question: Why is a national income of $300 not an equilibrium? At national income of $300, aggregate expenditures are $388. Step 13. Answer this question: How do expenditures and output compare at this point? Aggregate expenditures cannot exceed output (GDP) in the long run, since there would not be enough goods to be bought.
Let's begin by looking at the point where aggregate supply equals aggregate demand—the equilibrium. We can find this point on the diagram below; it's where the aggregate supply, AS, and aggregate demand, AD, curves intersect, showing the equilibrium level of real GDP and the equilibrium price level in the economy.
29 janv. 2024 · Commencing above the 45-degree line, this curve signifies that at lower income levels, spending exceeds income (even when income is low), and as income increases, it gradually slopes downwards. Equilibrium Point : The point at which the aggregate expenditure line intersects the 45-degree line denotes the Keynesian cross-equilibrium point of the economy.
