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PERFECT COMPETITION, SHORT-RUN PRODUCTION ANALYSIS: A perfectly competitive firm produces the profit-maximizing quantity of output that equates marginal revenue and marginal cost. This production level can be identified using total revenue and cost, marginal revenue and cost, or profit. Because a perfectly competitive firm faces a perfectly elastic demand curve, it efficiently allocates resources by equating price and marginal cost. In addition, the marginal cost curve above the average variable cost curve is the perfectly competitive firm's short-run supply curve.
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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, 2000-2025. [Accessed: December 14, 2025].
AmosWEB Encyclonomic WEB*pedia:Additional information on this term can be found at: WEB*pedia: aggregate expenditures line
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COMMODITY MONEY A medium of exchange (money) that has both value in use and value in exchange. Commodity money is first and foremost a commodity that provides users with satisfaction of their wants and needs. However, it also has the secondary function of acting as a medium of exchange for the economy. In the march toward economic complexity, commodity money emerged from barter exchanges, but then ultimately gave way to modern fiat money.
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Today, you are likely to spend a great deal of time at an auction seeking to buy either several magazines on fashion design or a package of 3 by 5 index cards, the ones without lines. Be on the lookout for letters from the Internal Revenue Service.
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The standard "debt" notation I.O.U. does not mean "I owe you," but actually stands for "I owe unto..."
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"In order to create there must be a dynamic force, and what force is more potent than love." -- Igor Stravinsky, violinist
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NAA
National Association of Accountants
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