Which relationship is shown on the income-expenditure model?
A) real GDP and aggregate expenditures
B) real GDP and consumption
C) real GDP and income
D) nominal GDP and income
E) investment and income

Question

Quizplus · Accepted Answer

The income-expenditure model shows the relationship between real GDP and aggregate expenditures, indicating that as aggregate expenditures increase, real GDP also increases. This relationship is shown through the equality of total output (GDP) and total spending (aggregate expenditures) in the economy.

Which Relationship Is Shown on the Income-Expenditure Model