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EXCHANGE RATES, AGGREGATE EXPENDITURES DETERMINANT: One of several specific aggregate expenditures determinants assumed constant when the aggregate expenditures line is constructed, and that shifts the aggregate expenditures line when it changes. An increase in the exchanges rates causes an increase (upward shift) of the aggregate expenditures line. A decrease in the exchanges rates causes a decrease (downward shift) of the aggregate expenditures line. Other notable aggregate expenditures determinants include consumer confidence, federal deficit, inflationary expectations, and interest rates.

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AUTONOMOUS GOVERNMENT PURCHASES

Government purchases by the government sector that do not depend on income or production (especially national income or gross domestic product). That is, changes in income do not generate changes in government purchases. Autonomous government purchases are best thought of as government purchases that the government sector undertake independent of income. They are measured by the intercept term of the government purchases line. The alternative to autonomous government purchases is induced government purchases, which do depend on income.

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