Look back at the income-expenditure diagram in Figure 3 and explain why some level of real GDP

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Look back at the income-expenditure diagram in Figure 3 and explain why some level of real GDP other than $6,000 (say, $5,000 or $7,000) is not an equilibrium on the demand side of the economy. Do not give a mechanical answer to this question. Explain the economic mechanism involved.

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Economics Principles and Policy

ISBN: 978-1305280595

13th edition

Authors: William Baumol, Alan Blinder

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