19) Refer to Figure 21-3. If national income is Y₁ and the aggregate expenditure function is AE₁, the economy is in equilibrium. there is unintended inventory accumulation and income will rise. there is unintended inventory accumulation and income will fall. there is unintended inventory decumulation and income will rise.

ECON MACRO
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ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter9: Aggregate Demand
Section: Chapter Questions
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19) Refer to Figure 21-3. If national income is Y₁ and the aggregate expenditure
function is AE₁,
the economy is in equilibrium.
there is unintended inventory accumulation and income will rise.
there is unintended inventory accumulation and income will fall.
there is unintended inventory decumulation and income will rise.
there is unintended inventory decumulation and income will fall.
Transcribed Image Text:19) Refer to Figure 21-3. If national income is Y₁ and the aggregate expenditure function is AE₁, the economy is in equilibrium. there is unintended inventory accumulation and income will rise. there is unintended inventory accumulation and income will fall. there is unintended inventory decumulation and income will rise. there is unintended inventory decumulation and income will fall.
Desired Aggregate Expenditure
B
A
0
45⁰
Y₁ Y₂
Y3
Actual National Income
FIGURE 21-3
AE = Y
AE₁
AEO
Transcribed Image Text:Desired Aggregate Expenditure B A 0 45⁰ Y₁ Y₂ Y3 Actual National Income FIGURE 21-3 AE = Y AE₁ AEO
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