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GROSS PRIVATE DOMESTIC INVESTMENT: Expenditures on capital goods to be used for productive activities in the domestic economy that are undertaken by the business sector during a given time period. This is the official item in the National Income and Product Accounts maintained by the Bureau of Economic Analysis measuring capital investment expenditures. Gross private domestic investment tends to be the least stable of the four expenditures, averaging between 12-18% of gross domestic product.

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INCOME ELASTICITY OF DEMAND: The relative response of a change in demand to a relative change in income. More specifically the income elasticity of demand can be defined as the percentage change in demand due to a percentage change in buyers' income. The income elasticity of demand quantitatively identifies the theoretical relationship between income and demand.

     See also | elasticity | price elasticity of demand | income | income, demand determinant | cross elasticity of demand |


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KEYNESIAN CROSS

A diagram illustrating the basic Keynesian theory of macroeconomics, with aggregate expenditures measured on the vertical axis and aggregate production measured on the horizontal axis, with the relation between aggregate expenditures and aggregate production represented by a positively-sloped aggregate expenditures line. The "cross" aspect of this diagram is the intersection between the aggregate expenditures line and a 45-degree line indicating every point of equality between aggregate expenditures and aggregate production. The "Keynesian" aspect of this diagram is derived from John Maynard Keynes, the developer and namesake of Keynesian economics.

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