The aggregate expenditures model and the aggregate demand curve can be reconciled because, other things equal, in the aggregate expenditures model the level of aggregate expenditures and therefore the level of real GDP vary inversely with the price level.
In economics, total expenditure is a measure of national income. Total expenditure is defined as the present value of all finished goods and services in the economy. Total expenditure is therefore the sum of all expenditures made by economic factors during a given period.
For example, if the annual real GDP is $9 trillion, total spending will be $8.6 trillion. These companies were left with $400 billion worth of goods they wanted to sell but never did. Their actual investment level is $400 billion higher than their projected investment level.
Gross expenditure is a macroeconomic tool used to measure and assess the total amount of economic activity or output in a country. Like Gross Domestic Product (GDP) and National Income, Gross Expenditure measures a country's total spending at a given point in time.
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