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AGGREGATE EXPENDITURE DETERMINANTS: An assortment of ceteris paribus factors that affect aggregate expenditures, but which are assumed constant when the aggregate expenditure line is constructed. Changes in any of the aggregate expenditures determinants cause the aggregate expenditure line to shift. While a wide variety of specific ceteris paribus factors can cause the aggregate expenditure line to shift, it's usually most convenient to group them into the four, broad expenditure categories -- consumption, investment, government purchases, and net exports. The reason is that changes in these expenditures are the direct cause of shifts in the aggregate expenditure line. If any determinant affects aggregate expenditures it MUST affect one of these four expenditures.

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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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"Nothing ever built arose to touch the skies unless some man dreamed that it should, some man believed that it could, and some man willed that it must. "

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A Perfect Picture Of PROFIT

Good news! Manny Mustard, my long-time friend and proprietor of Manny Mustard's House of Sandwiches is having a special on his Deluxe Club Sandwich. Let's drop in for a brief respite -- and lunch. More good news! Manny is bubbling profusely about the vitality of his business. Last month he turned a profit. Yes, that much cherished profit, the goal of business firms, be they large or small. Upon closer inspection Manny's profit calculation might be suffering from an oversight or two. It seems as though Manny neglected to pay himself a wage. Nor did he bother to include any interest expense on the savings he invested in his House of Sandwiches venture. But what the heck, he earned a profit -- didn't he?
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Today, you are likely to spend a great deal of time at a going out of business sale hoping to buy either a looseleaf notebook binder or hand lotion, a big bottle of hand lotion. Be on the lookout for strangers with large satchels of used undergarments.
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In his older years, Andrew Carnegie seldom carried money because he was offended by its sight and touch.
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