Final answer:
Total output can be measured from either total expenditure or total income, reflecting the two equivalent perspectives of GDP total purchases (expenditure) and production (income).
Step-by-step explanation:
The measurement of total output can be correctly understood through the question: Which of the following is true regarding the measurement of total output? The answer is that total output can be measured from either total expenditure or total income. This concept is central to understanding Gross Domestic Product (GDP), which can be viewed through different lenses - as total production, as total purchases, or as total income.
When we consider GDP as total production and purchases, it reflects the value of all the final goods and services produced within a country's borders in a specific time period. Considering it as total income involves summing up all earnings from this production, which includes wages for workers, dividends for shareholders, interest for lenders, and profits for entrepreneurs. Consequently, both spending on the final output and income from the production of these goods and services are two sides of the same coin. This dual perspective helps us avoid the problem of double counting in our calculations of national output.
Moreover, real GDP is often equated with national income (Y), denoting the real, inflation-adjusted sum of all income received for contributing resources to it. Thus, the assertion that total output can be measured from either the flow of total expenditure or the flow of total income is an accurate depiction of economic assessment.