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AGGREGATE EXPENDITURE EQUATION: An equation indicating that aggregate expenditures (AE) are the sum of consumption expenditures (C), investment expenditures (I), government purchases (G), and net exports (X-M), stated as: AE = C + I + G + (X-M). This equation surfaces in the Keynesian economic income-expenditure model in the form of the aggregate expenditures line. However, it's also central throughout the study of macroeconomics, including aggregate demand and the measurement of gross domestic product.

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PRINT AND MINT: A handy phrase for one method of controlling the money supply -- printing paper currency and minting metal coins. This was the method commonly used by governments BEFORE checkable deposits became a significant share of the money supply. In modern times the total quantity of money in circulation is controlled by controlling bank reserves and money creation process of banks. The print and mint method is largely used just to "fill in the gaps" and when the nonbank public decides to transfer money from checkable deposits to currency and coins.

     See also | money | money creation | monetary policy | currency | coin | checkable deposits | money supply | bank reserves |


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MARGINAL UTILITY

The additional utility obtained from the consumption or use of an additional unit of a good. It is specified as the change in total utility divided by the change in quantity. Marginal utility indicates what each additional unit of a good is worth to a consumer and provides a theoretical basis for understanding market demand and the law of demand. Marginal utility generally declines with increased consumption of a good, a reflection of the law of diminishing marginal utility.

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