Answer to Question #308477 in Macroeconomics for Jackey

Question

The equilibrium levels of income (Y),real investment and gross national expenditure are determined by the intersection of the AS and AD curves

True or false

Answer 1

False. The equilibrium levels of income (Y) and gross national expenditure are determined by the intersection of the AS and AD curves. However, the equilibrium in real investment is determined by the intersection of the IS-LM curves.