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INCOME-EXPENDITURE MODEL: A macroeconomic model, which captures the essence of Keynesian economics, is based on the equality between total income generated from gross domestic product and total expenditures on gross domestic product. The cornerstone of the income-expenditure model is the consumption function, which relates household consumption expenditures to income and gives rise to the aggregate expenditure line with the addition of investment, government purchases, and net exports. The intersection between the aggregate expenditure line at the 45-degree identifies equilibrium.
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DISEQUILIBRIUM, SHORT-RUN AGGREGATE MARKET The state of the short-run aggregate market in which aggregate expenditures are NOT equal to real production, which result in imbalances that induce changes in the price level, aggregate expenditures, and real production. In other words, the opposing forces of aggregate demand (the buyers) and short-run aggregate supply (the sellers) are out of balance. At the existing price level, either the four macroeconomic sectors (household, business, government, and foreign) are unable to purchase all of the real production that they seek or producers are unable to sell all of the real production that they have.
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ORANGE REBELOON
[What's This?]
Today, you are likely to spend a great deal of time browsing through a long list of dot com websites hoping to buy either a bottle of blackcherry flavored spring water or a travel case for you toothbrush. Be on the lookout for jovial bank tellers.
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John Maynard Keynes was born the same year Karl Marx died.
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"We work to become, not to acquire. " -- Elbert Hubbard, editor
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OBX
Oslo Stock Exchange (Norway)
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