Answer to Question #4500 in Macroeconomics for Emin

Question

in the 45 degree line model what is the "equilibrium condition" describing the level of aggregate output which satisfy both producers and their customers? If, in the aggregate, businesses produce more than this equilibrium output level, what happens to the extra output? How does this result help to explain the reaction by businesses that restores equilibrium ? If, on the other hand , aggregate output was less than the equilibrium level, what happens and how is equilibrium restored ?