The equilibrium of the keynesian cross shows: equality of planned expenditure and income in the long run. determination of equilibrium income and the interest rate in the long run. equality of planned expenditure and income in the short run. determination of equilibrium income and the interest rate in the short run.

equality of planned expenditure and income in the short run.

Explanation:

In the Keynesian cross model, the equilibrium level of income is determined by planned spending.

Aggregate income is labeled as Y on the horizontal axis and total planned spending s labeled as AD on the vertical axis. Since planned spending is central in this model, the equilibrium point can be achieved at potential GDP, but it can also happen at slightly higher or lower levels.

For example, Keynesians believe that tax cuts can lead to economic growth because the aggregate demand will increase. Higher aggregate demand leads to more planned spending which will in turn increase total income, resulting in economic growth.

where is the graph?