When aggregate expenditure = GDP:

A) net exports equal zero

B) the federal budget is balanced

C) saving equals zero

D) macroeconomic equilibrium occurs

• When aggregate expenditure = GDP D) macroeconomic equilibrium occurs.

The macroeconomic variables define the macroeconomic equilibrium. The GDP or the income of the economy and the aggregate expenditure out of the economy are both opposite sides of macroeconomic aggregate demand and aggregate supply. In the diagram of the Keynesian cross, the 45-degree line showing equilibrium aggregate income is balanced with aggregate expenditure, or when GDP= aggregate expenditure. This is where macroeconomic equilibrium is attained with Keynesian econom