Consider a Simple Macro Model with a Constant Price Level

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.Suppose desired aggregate expenditures are less than the current level of national income.The vertical distance between the AE curve and the 45-degree line represents

A) desired accumulation of inventories.
B) desired decumulation of inventories.
C) the amount by which output exceeds desired expenditures.
D) the output gap.
E) the amount by which desired expenditures exceeds output.