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8. Use the graph below to explain the determination of equilibrium GDP by the aggregate expenditures-domestic output approach. At equilibrium C + I, = Real

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8. Use the graph below to explain the determination of equilibrium GDP by the aggregate expenditures-domestic output approach. At equilibrium C + I, = Real GDP ($550 + $50 = $600). Why does the intersection of the aggregate expenditures schedule and the 45-degree line determine the equilibrium GDP? C+ = AE Consumption and investment $600 C 500 400 300 200 100 450 0 100 200 300 400 500 600 Real GDP

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