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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).
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AGGREGATE EXPENDITURES LINE: A line representing the relation between aggregate expenditures and gross domestic product used in the Keynesian cross. The aggregate expenditure line is obtained by adding investment expenditures, government purchases, and net exports to the consumption line. As such, the slope of the aggregate expenditure line is largely based on the slope of the consumption line (which is the marginal propensity to consume), with adjustments coming from the marginal propensity to invest, the marginal propensity for government purchases, and the marginal propensity to import. The intersection of the aggregate expenditures line and the 45-degree line identifies the equilibrium level of output in the Keynesian cross. See also | aggregate expenditures | gross domestic product | Keynesian cross | consumption expenditures | investment expenditures | government purchases | net exports | consumption line | marginal propensity to consume | marginal propensity to invest | marginal propensity for government purchases | marginal propensity to import | 45-degree line | Keynesian economics | aggregate demand |
Recommended Citation:AGGREGATE EXPENDITURES LINE, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2026. [Accessed: July 21, 2026].
AmosWEB Encyclonomic WEB*pedia:Additional information on this term can be found at: WEB*pedia: aggregate expenditures line
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AUTONOMOUS CONSUMPTION Household consumption expenditures that do not depend on income or production (especially disposable income, national income, or even gross domestic product). That is, changes in income do not generate changes in consumption. Autonomous consumption is best thought of as a baseline or minimum level of consumption that the household sector undertakes in the unlikely event that income falls to zero. It is measured by the intercept term of the consumption function or the consumption line. The alternative to autonomous consumption is induced consumption, which does depend on income.
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Today, you are likely to spend a great deal of time going from convenience store to convenience store hoping to buy either a replacement battery for your pocket calculator or a how-to book on home remodeling. Be on the lookout for strangers with large satchels of used undergarments.
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In the early 1900s around 300 automobile companies operated in the United States.
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