Draw a 45°-line diagram showing an equilibrium in the goods market. Label the equilibrium level of real GDP, Y₁. Now show on your graph each of the following two situations:
1. Real GDP is equal to Y₂, where Y₂ is greater than Y_1.
2. Real GDP is equal to Y₃, where Y₃ is less than Y₁ Be sure that your graph shows the level of aggregate expenditure and the level of unintended changes in inventories at Y₁, Y₂, and Y₃. Briefly explain how real GDP adjusts to equilibrium if it is initially equal to Y₂ or Y₃.