GDP is at the equilibrium level when a total intended house

GDP is at the equilibrium level when ...

a) total intended household spending equals business spending.

b) it is a full employment level.

c) the rate of inflation equals the rate of unemployment.

d) any further increases in intended spending increase the price level.

e) it equals the amount of intended spending.

Solution

Option a is the right answer

Business spending will be done for producing the product and household spending is done to purchase it. This is very true about equilibrium GDP , In which total production is equal to total purchase.