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AGGREGATE EXPENDITURE EQUATION: An equation indicating that aggregate expenditures (AE) are the sum of consumption expenditures (C), investment expenditures (I), government purchases (G), and net exports (X-M), stated as: AE = C + I + G + (X-M). This equation surfaces in the Keynesian economic income-expenditure model in the form of the aggregate expenditures line. However, it's also central throughout the study of macroeconomics, including aggregate demand and the measurement of gross domestic product.
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AGGREGATE EXPENDITURES LINE A graphical depiction of the relation between aggregate expenditures by the four macroeconomic sectors (household, business, government, and foreign) and the level of aggregate income or production. In Keynesian economics, the aggregate expenditures line is the essential component of the Keynesian cross analysis used to identify equilibrium income and production. Like any straight line, the aggregate expenditures line is characterized by vertical intercept, which indicates autonomous expenditures, and slope, which indicates induced expenditures. The aggregate expenditures line used in Keynesian economics is derived by adding or stacking investment, government purchases, and net exports to the consumption line.
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GREEN LOGIGUIN
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Today, you are likely to spend a great deal of time surfing the Internet trying to buy either a travel case for you toothbrush or a looseleaf notebook binder. Be on the lookout for slow moving vehicles with darkened windows.
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Post WWI induced hyperinflation in German in the early 1900s raised prices by 726 million times from 1918 to 1923.
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"Every man must decide whether he will walk in the light of creative altruism or in the darkness of destructive selfishness." -- Martin Luther King, Jr., clergyman
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BEA
Bureau of Economic Analisys
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