Use the Figure Below to Answer the Following Questions

question 129

Multiple Choice

Use the figure below to answer the following questions.
Figure 11.2.2
The economy depicted does not engage in international trade and has no government.Planned aggregate expenditure AE) is equal to the sum of consumption expenditure C) and investment I) .
-Refer to Figure 11.2.2.When real GDP is $100 billion,

• A)aggregate planned expenditure equals real GDP, and the economy is in equilibrium.
• B)aggregate planned expenditure is greater than real GDP, and firms decrease production.
• C)aggregate planned expenditure is less than real GDP, and firms increase production.
• D)real GDP is less than aggregate planned expenditure, and firms increase production.
• E)real GDP is greater than aggregate planned expenditure, and firms decrease production.

---

Definitions:

Market Wage

The prevailing pay rate for a specific job in the labor market.

Labor Supply

The total hours that workers in an economy are willing to work at a given wage rate.

Maximize Profits

The process or goal of achieving the highest possible profit margin through the efficient use of resources, pricing strategies, and cost management.

Equilibrium Price

The price point in the market at which the amount of goods being offered for sale matches the amount of goods buyers are willing to purchase.