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AGGREGATE EXPENDITURE 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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Lesson 21: Factor Demand | Unit 4: Determinants
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Page: 18 of 24
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- Because the demand for a factor of production is based on, or derived from, the demand of the output produced, should the product demand change, then so too will the factor demand.
- Changes in product demand are reflected by changes in the product price and marginal revenue.
- The factor demand curve presented in this diagram was derived based on a particular price, which was based on a particular demand.
- Increase In Product Demand
- Decrease In Product Demand
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ECONOMY The system of production, distribution, and consumption of goods and services that a society uses to address the problem of scarcity.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time watching the shopping channel looking to buy either a genuine down-filled comforter or a 200-foot blue garden hose. Be on the lookout for mail order catalogs with hidden messages.
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There were no banks in colonial America before the U.S. Revolutionary War. Anyone seeking a loan did so from another individual.
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"What gets measured gets done." -- Peter Drucker, educator
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ASX
Australian Stock Exchange
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