Question

Why aggregate supply is also called a 45° line?​

Answer 1

Explanation:

The 45-degree line represents an aggregate supply curve which embodies the idea that, as long as the economy is operating at less than full employment, anything demanded will be supplied.

Answer 2

The 45-degree line shows where aggregate expenditure is equal to output. This model determines the equilibrium level of real gross domestic product at whichever point aggregate expenditures are equal to total output. In a Keynesian cross diagram, real GDP is shown on the horizontal axis....

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