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PHYSICAL WEALTH: The ownership of productive resources, capital, and property and satisfaction-generating goods. Also termed real wealth. This should be contrasted with financial wealth that is based on ownership of financial or paper assets.
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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. The aggregate expenditures equation is the sum of the four aggregate expenditures (consumption expenditures, investment expenditures, government purchases, and net exports). This equation provides a short-hand notion that summarizes the demand side of the economy.The general aggregate expenditures equation is: where: AE is aggregate expenditures, C is consumption expenditures, I is investment expenditures, G is government purchases, and X-M is net exports, exports (X) minus imports (M).This particular version of the aggregate expenditures equation is for all four macroeconomic sectors (household sector, business sector, government sector, and foreign sector). In some circumstances reduced versions, with fewer sectors, are more useful. A three-sector version that includes the household, business, and government sectors is: And the simplest aggregate expenditures equation is for the two private sectors--household and business. It is specified as:
Recommended Citation:AGGREGATE EXPENDITURES EQUATION, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: May 22, 2025].
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Today, you are likely to spend a great deal of time calling an endless list of 800 numbers seeking to buy either a T-shirt commemorating the first day of winter or software that won't crash your computer. Be on the lookout for poorly written technical manuals.
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On a typical day, the United States Mint produces over $1 million worth of dimes.
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"Carpe diem! Rejoice while you are alive; enjoy the day; live life to the fullest; make the most of what you have. It is later than you think." -- Horace, Ancient Roman poet
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IO
Industrial Organization
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