Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
Textbook Question
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Chapter D, Problem 6RQ

Exercise D6

What is on the axes of an expenditure-output diagram?

Expert Solution & Answer
Check Mark
To determine

To state:

The names in the axes of an expenditure-output diagram.

Explanation of Solution

The diagram of expenditure-output is the one which gives equilibrium level of real GDP and is also known as Keynesian cross diagram. The axes of this diagram are having national output on the horizontal axes and the total or aggregate expenditure on the vertical axes. The intersection of these two provides real GDP.

Economics Concept Introduction

The expenditure-output diagram is the diagram which helps in measuring the equilibrium level of real GDP which is seen at the intersection of output and total expenditure in the economy.

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Principles of Economics 2e
Author:Steven A. Greenlaw; David Shapiro