By the end of this section, you will be able to: Explain what the expenditure-output model/Keynesian cross diagram shows and what the equilibrium point on the diagram represents. Analyze the consumption function, investment function, government spending, taxes, imports and exports is relation to the expenditure-output model. Analyze the location of an equilibrium point on an expenditure-output model to determine characteristics of the economy, including the presence of a recessionary gap or an inflationary gap. Evaluate the stability of an economy based on the multiplier effect in relation to the expenditure-output model.