Question

To arrive at the value of equilibrium level of income, there must exists an equality between ex-ante ______ and ex-ante ______.

1. Aggregate Demand, Aggregate Supply
2. Aggregate Demand, Savings
3. Aggregate Demand, Investment
4. Savings, Investment

Options

• (i) and (ii)

• (i) and (iv)

• (ii) and (iii)

• (iii) and (iv)

Answer 1

(i) and (iv)

To arrive at the value of equilibrium level of income, there must exists an equality between ex-ante aggregate demand and ex-ante aggregate supply, and also between ex-ante savings and ex-ante investment.