Economics says that there is direct possitive correlation between income and spending. That is as income increases, so does the spending and vise versa. The more money people make, the more they spend on purchasing goods and services.There is a model by John Maynard Keynes which suggests that "In
a state of unemployment and unused production capacity, one can only enhance
employment and total income by first increasing
expenditures for either consumption or investment."
In "Equilibrium in the Income-Expenditure Model", it is suggested that macro equilibrium occurs at the level of GDP where national income equals aggregate expenditure. That is, when Income equals Expenditures.
On Macro level let us examine the relationship of Income and Expenditure by studying the Gross National Income and Gross National Expenditure data of Pakistan.
You must understand that Pakistan also borrows therefore consumption can be more than its income. In addition, the basic assumptions of economics such as "other factors remaining constant" do not apply to the actual data since other factors do change.
| Year | GrossNationalIncome | GrossNationalExpenditure |
| 1967 | 7586308273.83452 | 8065807853.84292 |
| 1968 | 8186686266.27468 | 8544078916.42167 |
| 1969 | 8808273834.52331 | 9081918017.63965 |
| 1970 | 10142377152.45700 | 10719074254.51490 |
| 1971 | 10767114657.70680 | 11200822742.54510 |
| 1972 | 9362321336.31824 | 9793944653.00499 |
| 1973 | 6499196065.44973 | 6500513742.55178 |
| 1974 | 9043636363.63636 | 9395630393.93939 |
| 1975 | 11434444444.44440 | 12648500232.32320 |
| 1976 | 13567878787.87880 | 14492585212.12120 |
| 1977 | 15810303030.30300 | 16598759686.86870 |
| 1978 | 19196262626.26260 | 19466400525.25250 |
| 1979 | 21313535353.53540 | 22085680212.12120 |
| 1980 | 25601212121.21210 | 26440694080.80810 |
| 1981 | 30392726727.27270 | 31106006414.14140 |
| 1982 | 33128721601.89570 | 34357446009.47870 |
| 1983 | 31793858937.00790 | 31864943267.71650 |
| 1984 | 34090011064.11400 | 34751650608.48920 |
| 1985 | 33672031372.03170 | 35004034498.68070 |
| 1986 | 32789275641.66150 | 35333278834.46990 |
| 1987 | 35470840669.96800 | 35942540547.62600 |
| 1988 | 40130104312.16180 | 41582786590.71490 |
| 1989 | 41632528799.63680 | 43330007671.55310 |
| 1990 | 41735288201.74820 | 43144393946.61800 |
| 1991 | 46520751747.93910 | 46161373674.51670 |
| 1992 | 49141098847.88440 | 50176550109.96550 |
| 1993 | 51862932126.41730 | 54636187401.52620 |
| 1994 | 52027351813.86940 | 53328125363.58830 |
| 1995 | 61092371435.53500 | 62280965147.45310 |
| 1996 | 63107002275.75460 | 66184676586.00980 |
| 1997 | 61935800691.61450 | 65360397999.71720 |
| 1998 | 61626071021.28220 | 62840084822.33070 |
| 1999 | 62426345308.53850 | 63989601438.48200 |
| 2000 | 73025445759.84540 | 74874530079.72940 |
| 2001 | 71373943661.97180 | 73070766059.77330 |
| 2002 | 72691117245.85900 | 72372182526.79440 |
| 2003 | 85836776506.74410 | 82750793921.80300 |
| 2004 | 100139968733.71500 | 96964999131.49210 |
| 2005 | 111767372670.05400 | 113744541558.28400 |
| 2006 | 139768396467.55700 | 147440549580.16300 |
| 2007 | 154985420769.13700 | 162384050585.31300 |
| 2008 | 173417985019.14600 | 188496526584.22100 |
| 2009 | 172564093744.70500 | 180394874793.46700 |
| 2010 | 184163841544.98100 | 187761012008.11000 |
| 2011 | 223172963541.66100 | 224280807629.87500 |
| 2012 | 235976451836.40500 | 242361632992.05400 |
| 2013 | 243216656337.79500 | 246893548587.01000 |
| 2014 | 258227372243.28500 | 260039272416.58900 |
| 2015 | 287067806084.67400 | 287995768589.56600 |
| 2016 | 296011975898.69600 | 298059820074.00600 |
| 2017 | 321596716024.88300 | 333364939129.10700 |
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