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complete a-e please
QUESTIONS 1. Answer the following questions based on the figure below a. The 45° line represents (1) aggregate demand or (2)
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Answer #1

A.The 45° line represents aggregate expenditure such that AE=AD.

Answer-AD.

B.C+II is consumption and investment and they are parts of AD.

Answer-Aggregate Demand.

C.Economy is in equilibrium when AD=AE.Equilibrium output=400

Answer-400

D.HI is excess of aggregate expenditure over aggregate demand which creates excess inventory.

Answer-Excess inventory

E.Savings is in deficit when investment is more than savings.

Answer-Excess intended investment

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