"The diameter is larger and will rotate slower [highlight #FCE94F]but induce a greater tension in the belt on the driven pulley[/highlight] and in turn a larger torque, which will give an output power equivalent to the input power on the driving pulley. Is my understanding off?"
Perhaps an understandikng of Tension would be helpful. Tension is an in-line Force in the belt that tries to stretch the belt and make it longer, but the belt strength resists most of the elongation. At rest the belt is placed under tension by moving the sheaves apart until the required tension is achieved. Both belt spans/strands have the same tension, assuming the sheaves/shafts are free to rotate. The required tension specified from machine or belt OEM can be measured by the elongation/stretch method, force spring-deflection method, or sonic/vibration natural frequency method. When the machine is operating one belt span has increased tension created by the drive sheave, and the other belt span has less tension. The tension Force in each span, while different, is the same at each end or at each sheave. Shaft Torque equals belt tension Force times radius of each sheave. A larger sheave diameter (therefore radius) will have greater Torque than a smaller sheave, irrespctive of which sheave is the driver or driven one. I am sure there are many references and youtube videos that can offer a better explanation.
Walt