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AE (aggregate expenditures) are an estimation of how much stuff is purchased. Income (Y) is an estimation of how much stuff is made. Expenditure equilibrium
AE (aggregate expenditures) are an estimation of how much stuff is purchased. Income (Y) is an estimation of how much stuff is made. Expenditure equilibrium is when AE=Y. A surplus occurs when AE < Y and a shortage occurs when AE > Y. Would there be a shortage or a surplus during a recession? An inflationary period? What situation do you believe Canada is in right now? provide support for your answer.
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