KEYNESIAN EQUILIBRIUM: The state of the macroeconomy in which aggregate expenditures are equal to aggregate output. This is illustrated using the income-expenditure model, or Keynesian cross, as the intersection of the aggregate expenditures line and the 45-degree line. The aggregate expenditures line is the summation of consumption expenditures, investment expenditures, government purchases, and net exports. The 45-degree line represents all combinations in which aggregate expenditures equal aggregate output. Keynesian equilibrium is also represented by the saving-investment, or injection-leakage, model as the intersection between the injection line (investment expenditures, government purchases, and exports) and the leakage line (saving, taxes, and imports). See also | macroeconomy | aggregate expenditures | aggregate output | income-expenditure model | aggregate expenditures line | 45-degree line | consumption expenditures | investment expenditures | government purchases | net exports | injection-leakage model | injection | leakage | Recommended Citation:KEYNESIAN EQUILIBRIUM, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: March 19, 2024]. AmosWEB Encyclonomic WEB*pedia:Additional information on this term can be found at: WEB*pedia: Keynesian equilibrium
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