Question

The total amount households and businesses plan to spend on goods and services at every level of income is determined by the aggregate expenditure function. This model focuses on the short run relationship between real spending and ________. g

Answer 1

real GDP

Step-by-step explanation:

Aggregate expenditure model is a term in economics that is used to describe a macroeconomic model that concentrates on the short-run relationship between total spending and real GDP, on the assumption that the price level is constant.

In other words, it compares the element of real spending with the level of economic activity which is real GDP