GOVERNMENT PURCHASES LINE: A graphical depiction of the relation between government purchases and national income (or gross domestic product) that plays a role in Keynesian economics and the Keynesian cross. The slope of this line is positive, greater than zero, less than one, and goes by the name marginal propensity for government purchases. The vertical intercept of this line is autonomous government purchases. The aggregate expenditures line used in the Keynesian cross is obtained by adding this government purchases line, as well as, investment expenditures and net exports, to the consumption line. The government purchases line is also combined with investment expenditures for the Keynesian saving-investment model. See also | government purchases | government sector | consumption function | Keynesian economics | consumption expenditures | disposable income | marginal propensity to consume | aggregate expenditures | aggregate expenditures line | Keynesian cross | induced consumption | autonomous consumption | net exports line | investment line | aggregate expenditures line |
