Total income is always equal to ________ expenditures;but only in equilibrium is it equal to ________ expenditures,producing in equilibrium ________ on income to change.

Question

Quizplus · Accepted Answer

Total income is always equal to actual expenditures because what is actually spent in the economy is what generates income. However, it is only in equilibrium that total income equals planned expenditures, as this is when the economy's output matches what people, businesses, and the government intend to spend. In this state of equilibrium, there is no pressure on income to change because the amount people plan to spend equals the amount actually spent, indicating a balance in the economy.

Total Income Is Always Equal to ________ Expenditures;but Only in Equilibrium