INDUCED EXPENDITURE: An aggregate expenditure (consumption, investment, government purchases, and net exports) that depends on national income or gross domestic product. These four aggregate expenditures are conveniently separated into two types, induced, which is our current topic of expenditures unrelated to national income or GDP, and autonomous expenditures, expenditures which are unrelated to national income or GDP. Induced expenditures are graphically depicted as the slope of the aggregate expenditures line, and depend in large part on the marginal propensity to consume. The induced relation between income and expenditures form the foundation of the multiplier effect triggered by changes in autonomous expenditures.

     See also | aggregate expenditures | autonomous expenditure | consumption expenditures | investment expenditures | government purchases | net exports | gross domestic product | national income | business cycle | multiplier | accelerator | induced consumption | induced investment | aggregate expenditures line |

INDUCED EXPENDITURE, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2022. [Accessed: December 7, 2022].

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A curve that graphically represents the relation between average revenue received by a perfectly competitive firm for selling its output and the quantity of output sold. Because average revenue is essentially the price of a good, the average revenue curve is also the demand curve for a perfectly competitive firm's output.

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