The Level of Aggregate Expenditures in the Private Closed Economy

question 41

Multiple Choice

The level of aggregate expenditures in the private closed economy is determined by the

• A) expenditures of consumers and businesses.
• B) intersection of the saving schedule and the 45-degree line.
• C) equality of the MPC and MPS.
• D) intersection of the saving and consumption schedules.

---

Definitions:

Economic Contraction

A slowdown of the economy characterized by a decline in spending and during which businesses cut back on production and lay off workers.

Decline

A decrease or reduction in value, quality, or quantity over a certain period of time.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for some degree of market power.