Level of planned output coincides with planned expenditure when:

(AD = Aggregate Demand, AS = Aggregate Supply)

$AD=AS$

The correct answer is Option (1) → $AD=AS$

The level of planned output coincides with planned expenditure when Aggregate Demand (AD) equals Aggregate Supply (AS). This is the condition for equilibrium in the goods market, where:

• There is no unplanned accumulation or depletion of inventories.

• The economy is in a state where the total amount produced (AS) is exactly what people, businesses, and the government plan to buy (AD).

If AD is greater than AS, there will be excess demand.
If AD is less than AS, there will be excess supply.