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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.
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GOVERNMENT PURCHASES: Expenditures on final goods and services (that is, gross domestic product) undertaken by the government sector. Government purchases are used to operate the government (administrative salaries, etc.) and to provide public goods (national defense, highways, etc.). Government purchases do not include other government spending for transfer payments. These are expenditures on final goods by all three levels of government: federal, state, and local governments. Government purchases are financed by a mix of taxes and borrowing. See also | gross domestic product | transfer payment | taxes | government borrowing | circular flow | government sector |
Recommended Citation:GOVERNMENT PURCHASES, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: April 27, 2025].
AmosWEB Encyclonomic WEB*pedia:Additional information on this term can be found at: WEB*pedia: government purchases
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AGGREGATE EXPENDITURES EQUATION An equation that summarizes the four aggregate expenditures on gross domestic product by the four macroeconomic sectors. In the study of Keynesian economics, this equation is commonly used to summarize the demand side of the macroeconomy. The aggregate expenditures equation actually comes in three different versions depending on how many of the four sectors and their expenditures are included.
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Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors wanting to buy either a wall poster commemorating next Thursday or a pair of gray heavy duty boot socks. Be on the lookout for florescent light bulbs that hum folk songs from the sixties.
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A U.S. dime has 118 groves around its edge, one fewer than a U.S. quarter.
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