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In the Keynesian cross, where is equilibrium income found?
AWhere AD meets the 45-degree line
BWhere AD meets the vertical axis
CWhere saving is exactly zero
DWhere the AD line is steepest
Answer & Solution
Correct answer: A. Where AD meets the 45-degree line
Equilibrium lies where the aggregate demand curve intersects the 45-degree line, so planned spending equals output.
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