This is a question that has four parts, here are parts two and three. 1.2. Use the information in Table 1 to analyze aggregate expenditures (AE) model (Figure 1. Equilibrium in a Private Closed Economy). (table 1 and figure one are in the attachments; table 1 is the table and figure 1 is the graph). 1.3. Identify the mistake and explain why the graph of the aggregate expenditures line does not correctly illustrate the economy's equilibrium.
This is a question that has four parts, here are parts two and three.
1.2. Use the information in Table 1 to analyze aggregate expenditures (AE) model (Figure 1. Equilibrium in a Private Closed Economy). (table 1 and figure one are in the attachments; table 1 is the table and figure 1 is the graph).
1.3. Identify the mistake and explain why the graph of the aggregate expenditures line does not correctly illustrate the economy's equilibrium.
1.2) Aggregate Output and Aggregate Expenditure must equal each other for an equilibrium to occur. The intersection of the aggregate expenditure and Keynesian cross is referred to as the point of macroeconomic equilibrium. The graph shows a 45-degree line that represents the Keynesian cross.
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