Question:
[Table Data Context: Identifying Equilibrium/Disequilibrium]
(1) C:250 I:50 G:75 X:75 M:25 Y:400… Under which situation is this economy in disequilibrium?
Correct Answer:
(1)
Answer Explanation:
Aggregate Expenditure is calculated as $AE = C + I + G + X – M$. For row 1, $AE = 250 + 50 + 75 + 75 – 25 = 425$. Since Planned Expenditure (425) does not equal Actual National Income (400), this represents a state of macroeconomic disequilibrium with an unplanned depletion of inventory stocks.
Topic: Macroeconomic Equilibrium Year: 2017
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