Principles of Macroeconomics / Unit 9 MAC 0820 short lesson, about 20 seconds
Why That Point and No Other
Captions available
The idea
Equilibrium is where the expenditure line crosses the 45-degree line. Above it, spending falls short of output, goods pile up unsold and firms cut production. Below it, spending exceeds output, shelves empty and firms expand.
In practice
Only at the crossing is there no pressure in either direction.
Where people slip
Spending exceeding output is what makes firms produce more, not an impossibility.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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