What is the term for the level of output where output equals planned aggregate expenditure?

The term for the level of output where output equals planned aggregate expenditure is known as short run equilibrium output. In this context, short run equilibrium is achieved when the total amount of goods produced in the economy matches the total amount that households, businesses, and government intend to purchase at a given price level.

At this equilibrium point, there is no incentive for firms to change their level of production because their sales match their production levels. If production exceeds planned expenditure, inventories will rise, prompting firms to cut back on output. Conversely, if planned expenditures exceed production, inventories will fall, prompting firms to increase output. This dynamic interplay helps maintain balance in the economy.

In contrast, long run equilibrium output refers to a situation where the economy is producing at full capacity, taking into account all factors of production and resource flexibility. Potential output represents the highest level of sustainable output an economy can produce without generating inflation, while natural output level typically refers to the economy's output when unemployment is at its natural rate. These concepts relate to longer-term adjustments in the economy rather than the immediate balance achieved in the short run.