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Income-Expenditure Equilibrium Analysis

The document shows three graphs illustrating macroeconomic concepts. The first graph shows a production possibilities frontier and the impact of shifts in aggregate demand. The second graph depicts the equality between income and expenditure in an economy at full employment. The third graph illustrates an inflationary gap that can occur when actual output exceeds potential output and pushes inflation higher.

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shantae Allen
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4 views2 pages

Income-Expenditure Equilibrium Analysis

The document shows three graphs illustrating macroeconomic concepts. The first graph shows a production possibilities frontier and the impact of shifts in aggregate demand. The second graph depicts the equality between income and expenditure in an economy at full employment. The third graph illustrates an inflationary gap that can occur when actual output exceeds potential output and pushes inflation higher.

Uploaded by

shantae Allen
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

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Level

P1 AS

AD1
AD2
0
Qu Qf Real output, GDP

Equality between Income and Expenditure

Expenditure 45
Expenditure (C+I+G+X)

0 Y1 Ye Income (Y)

Inflationary Gap

1
Expenditure Ex = Y
Expenditure (C+I+G+X-M)

0 Yf Ye Income (Y)

Expenditure Ex = Y
Expenditure (C+I+G+X-M)

0 Ye Yf Income (Y)

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