what-does-the-intersection-of-the-aggregate-expenditures-line-and-the-45-degree-

Question

What does the intersection of the aggregate expenditures line and the 45-degree line indicate in the AE model?

Accepted Answer

It indicates the equilibrium GDP where planned spending equals actual output.

Answer

It marks the point where inflation begins to rise.

Answer

It represents the level of GDP where savings equal investment.

Answer

It shows the maximum potential GDP.