The correct option is
1 only
Explanation
In macroeconomics, it is crucial to distinguish between accounting identities (which are always true by definition) and equilibrium conditions (which hold true only when specific economic forces balance). This distinction relies on the concepts of ex ante (planned) and ex post (actual/realized) variables.
Statement-wise Analysis:
- Statement 1 is Correct: The national income accounting identity states that actual (ex post) output produced is always equal to actual (ex post) aggregate demand. This equality is maintained through unplanned inventory accumulation or decumulation. If producers produce more than is demanded, the unsold goods are counted as inventory investment (a component of actual investment). Thus, Ex Post Supply ≡ Ex Post Demand.
- Statement 2 is Incorrect: The equilibrium condition is strictly defined based on planned (ex ante) variables. Equilibrium occurs when Ex Ante Aggregate Supply equals Ex Ante Aggregate Demand. While it implies that actual output matches planned demand (resulting in zero unplanned inventory), the formal definition of the equilibrium condition relies on the equality of intentions (plans) of producers and consumers, not a mix of ex post output and ex ante demand.
- Statement 3 is Incorrect: An accounting identity is a tautology; it holds true under all circumstances, whether the economy is in equilibrium or disequilibrium. For example, the identity \( Y \equiv C + I \) (where \( I \) is actual investment) is always valid. In contrast, the equilibrium equation \( Y = C + I \) (where \( I \) is planned investment) holds only at the equilibrium level of income.
Key Takeaway:
The Accounting Identity relates to ex post (realized) values and is always true due to inventory adjustments. The Equilibrium Condition relates to ex ante (planned) values and holds true only when planned saving equals planned investment (or planned supply equals planned demand).