Eco Growth - 45° Line? (1 Viewer)

[SC]

When graphing aggregate demand and aggregate supply,

- What is the 45° line? If it's aggregate supply, that equals income, right? If so, then how does that differ from the income we measure across the horizontal axis.
- Does the vertical axis correspond to the the sum of all of expenditure? If so, how does that differ from aggregate demand?

Please, help!

 

[monique66]

When graphing aggregate demand and aggregate supply,

- What is the 45° line? If it's aggregate supply, that equals income, right? If so, then how does that differ from the income we measure across the horizontal axis.
- Does the vertical axis correspond to the the sum of all of expenditure? If so, how does that differ from aggregate demand?

Please, help!

Yes, the 45 degree line is agg S and i'm pretty sure thats income (btw this is the horizontal axis)
On the vertical axis is agg D and that represents Expenditure. Did that answer your question, it kinda confused me..:S

 

[SC]

.. I'm not sure

But how can you graph aggregate supply (the 45° line / ie: income), when the x-axis is income too?

Similarly, if the y-axis is aggregate demand, how can you graph the aggregate demand line for those axes?

 

[azza_3761]

.. I'm not sure

But how can you graph aggregate supply (the 45° line / ie: income), when the x-axis is income too?

Similarly, if the y-axis is aggregate demand, how can you graph the aggregate demand line for those axes?

Isn't the x-axis quantity demanded?

 

[Rafy]