|
|
SAY'S LAW: A classical economic proposition stating that the production of aggregate output creates sufficient aggregate demand to purchase all of the output produced. In other words, supply creates its own demand. This is one of the three assumptions underlying the macroeconomic theory of classical economics which concluded that unrestricted market activity would generate full employment. The other two assumptions are flexible prices and saving-investment equality. Say's law is closely associated with the circular flow model.
Visit the GLOSS*arama
|
|
|
|
                           IMPORTS LINE: A graphical depiction of the relation between imports bought from the foreign sector and the domestic economy's aggregate level of income or production. This relation is most important for deriving the net exports line, which plays a minor, but growing role in the study of Keynesian economics. An imports line is characterized by vertical intercept, which indicates autonomous imports, and slope, which is the marginal propensity to import and indicates induced imports. The aggregate expenditures line used in Keynesian economics is derived by adding or stacking the net exports line, derived as the difference between the exports line and imports line, onto the consumption line, after adding investment expenditures and government purchases. The imports line shows the relation between imports purchased from the foreign sector and aggregate income or production. The income and production measures most commonly used are national income and gross domestic product. The purpose of the imports line is to graphically illustrate the imports-income relation for the foreign sector, which is then used to derive the net exports line by vertically subtracting it from the exports line, after which it is then integrated into the aggregate expenditures line used in Keynesian economics.Net exports are the difference between exports and imports, or exports minus imports. Exports are purchases of domestic production by the foreign sector and imports are purchases of foreign production by the domestic economy. While exports are totally autonomous, imports are induced by the level of domestic income and production. Reflecting this, the imports line is positively-sloped, with the slope equal to the marginal propensity to import (MPM). The vertical intercept, or Y-intercept, of the imports line is then autonomous imports. | Imports Line |  |
The positively-sloped red line, labeled M in the exhibit to the right, indicates a typical imports line. Line any straight line, this imports line is characterized by two key parameters, intercept and slope. The intercept indicates autonomous imports and the slope indicates induced imports.Identifying numbers for these two parameters for this particular line indicates that the intercept is $0, meaning autonomous imports is $0, and the slope is 0.075, meaning a $1 increase in domestic income or production induces a $0.075 increase in imports. In this particular case, the imports line has a zero intercept, indicating no autonomous imports, but that need not be the case. Most notable is that the slope of the imports line is the marginal propensity to import (MPM).
Recommended Citation:IMPORTS LINE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2026. [Accessed: January 20, 2026].
Check Out These Related Terms... | | | | | | | | | | | |
Or For A Little Background... | | | | | | | | | |
And For Further Study... | | | | | | | | | | | | | | |
Search Again?
Back to the WEB*pedia
|
|
|
BLACK DISMALAPOD
[What's This?]
Today, you are likely to spend a great deal of time calling an endless list of 800 numbers hoping to buy either a replacement remote control for your stereo system or a computer that can play video games and burn DVDs. Be on the lookout for jovial bank tellers.
Your Complete Scope
This isn't me! What am I?
|
|
|
There were no banks in colonial America before the U.S. Revolutionary War. Anyone seeking a loan did so from another individual.
|
|
|
"Act well at the moment, and you have performed a good action for all eternity." -- Johann Kaspar Lavater
|
|
CJE
Canadian Journal of Economics
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
