Explanation The economy transacts the goods and services for getting the money in return. This means that the money acts as a medium between the buyers and sellers. When the buyers give money, it is the consumption expenditure of the consumers or the buyers...

Why an economy’s income must equal its expenditure.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN: 9781337091985

Author: N. Gregory Mankiw

Publisher: Cengage Learning

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Question

Chapter 5, Problem 1QR

To determine

Why an economy’s income must equal its expenditure.

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Similar questions

Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100 worth of trees into 150 worth of lumber. It used 100 worth of that lumber to produce $250 worth of bookshelves. Assuming the country produces no other outputs, and there are no other inputs used in producing trees, lumber, and bookshelves, what is this nations GDP? In other words, what is the value of the final goods the nation produced including trees, lumber and bookshelves?

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