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AGGREGATE EXPENDITURE DETERMINANT: A ceteris paribus factor that affects aggregate expenditures, but which is 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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Lesson 10: Gross Domestic Product | Unit 1: Measuring Production
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Page: 4 of 25
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The third GDP highlight phrase is 'a given period of time'. GDP is production that takes place during a specific period, usually one year. - GDP is a flow. Current production takes place during the specific period of time under study.
- Flows are measured over a period of time. GDP is measured from January 1st to December 31st.
- Stocks are measured at a point in time. The quantity of money is measured at an instant in time, like July 26th at 8:15.
- In addition to GDP, other production and income measures in this lesson are flows.
- In addition to money, employment, business inventories, and labor force are stocks.
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FEDERAL DEFICIT, 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 federal deficit causes an increase (upward shift) of the aggregate expenditures line. A decrease in the federal deficit causes a decrease (downward shift) of the aggregate expenditures line. Other notable aggregate expenditures determinants include consumer confidence, financial wealth, inflationary expectations, and exchange rates.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time at an auction trying to buy either a small, foam rubber football or an instructional DVD on learning to the play the oboe. Be on the lookout for the last item on a shelf.
Your Complete Scope
This isn't me! What am I?
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Helping spur the U.S. industrial revolution, Thomas Edison patented nearly 1300 inventions, 300 of which came out of his Menlo Park "invention factory" during a four-year period.
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"If anything terrifies me, I must try to conquer it. " -- Francis Charles Chichester, yachtsman, aviator
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L/I
Letter of Intent
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