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DEMAND ELASTICITY AND TOTAL EXPENDITURE: The notion that price-induced changes in total expenditure for a good (price times quantity) depends on the relative price elasticity of demand. In particular, for relatively elastic demand (1 < E < ∞) changes in price cause total expenditure to change in the opposite direction. An increase in price causes total expenditure to fall and a decrease in price causes total expenditure to rise. For relatively inelastic demand (0 < E < 1) changes in price cause total expenditure to change in the same direction. An increase in price causes total expenditure to rise and a decrease in price causes total expenditure to fall. For unit elastic demand (E =1) price changes do not cause any change in total expenditure. Total expenditure is the same whether price increases or decreases.
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INDUCED EXPENDITURES Expenditures on aggregate production by the four macroeconomic sectors that depend on income or production (especially national income or even gross domestic product). That is, changes in income generate changes in these expenditures. Each of the four aggregate expenditures--consumption, investment expenditures, government purchases, and net exports--have an induced component. Induced expenditures are measured by the slope of the aggregate expenditures line. The alternative to induced expenditures are autonomous expenditures, expenditures which do not depend on income.
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BLUE PLACIDOLA
[What's This?]
Today, you are likely to spend a great deal of time looking for a downtown retail store trying to buy either a rechargeable battery for your camera or a coffee cup commemorating the first day of spring. Be on the lookout for strangers with large satchels of used undergarments.
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On a typical day, the United States Mint produces over $1 million worth of dimes.
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"Executives who get there and stay suggest solutions when they present the problems. " -- Malcolm Forbes, business executive
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TIFFE
Tokyo International Financial Futures Exchange (Japan)
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