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5.2.7 AD/AS analysis of the impact of expansionary and contractionary fiscal policy

Why does the intersection of AD and AS determine equilibrium national income?

A

It shows where the price level equals real output.

B

It shows where planned spending equals real output.

C

It shows where planned saving equals planned investment.

D

It shows where exports equal imports.

5.2.7 AD/AS analysis of the impact of expansionary and contractionary fiscal policy Flashcards

  1. Intl A Level
  2. /Economics
  3. /5.2.7 AD/AS analysis of the impact of expansionary and contractionary fiscal policy

22 flashcards on CIE Intl A Level Economics 5.2.7 AD/AS analysis of the impact of expansionary and contractionary fiscal policy: the key terms and definitions you need to recall.