Principles of Macroeconomics / Unit 9 MAC 0815 short lesson, about 20 seconds
Output Is Also Income
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The idea
The expenditure-output model puts real GDP on the horizontal axis and total planned spending on the vertical. Because every dollar of output becomes someone's income, the horizontal axis measures national income as well.
In practice
The same axis answers how much was produced and how much was earned.
Where people slip
Everything later in this unit depends on that identity, so it is stated first.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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