The document discusses key macroeconomic concepts including aggregate output, aggregate income, consumption, and saving. It explains that aggregate output is the total goods and services produced in an economy, while aggregate income is the total income received by all factors of production. It also defines that consumption is how households spend their income on goods and services, while saving is the portion of income that is not consumed and is instead accumulated. Finally, it states that since income can only be used for consumption or saving, the fraction of additional income that is saved is called the marginal propensity to save.

1. Aggregate Expenditure and Equilibrium Output