Equilibrium GDP by the formula: GDP = AE, where the total value of production is equal to the sum of the cost of goods sold.In turn, AE = C + I & amp ;, so happens: GDP = C + I & amp ;.This formula can be used, provided that all manufactured goods are bought, ie there is no surplus and deficit production.
Plot to the situation has been more clearly presented.The vertical axis of the name AE and horizontal GDP.Then, in accordance with the existing values ​​you insert them in the chart.At each point, which is on the bisector 0B will characterize a situation where all manufactured products of the company is fully realized, that is, every point and AE will equal GDP.In other words, 0B is
the geometric location of possible points of macroeconomic equilibrium.When plotting the actual total expenditure, it is necessary to sum the two functions - investment and consumption.Since the I & amp;is const, AE schedule will offset line C (costs).Make a projection of values ​​(points marked in the figure) on the axis of the volume of output, so you get the value of the equilibrium volume.
Note the mechanism by which it was achieved balance.If the total cost turned out to be less than the volume produced products (AE GDP per firm may be a trend that the cost to produce more than the goods are released. Therefore, inventories are gradually reduced, and this may encourage the company to build up the volume of production to the level of the equilibrium volume.
Calculate the equilibrium volume flow of income. It is necessary to take into account that part of the income that earns company preserved. Therefore, these savings are certain exemptions from the total income, so GDP is larger than the cost(C
  • production equilibrium