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BALANCE OF PAYMENTS DEFICIT: An imbalance in a nation's balance of payments in which payments made by the country exceed payments received by the country. This is also termed an unfavorable balance of payments. It's considered unfavorable because more currency is flowing out of the country than is flowing in. Such an unequal flow of currency will reduce the supply of money in the nation and subsequently cause an increase in the exchange rate relative to the currencies of other nations. This then has implications for inflation, unemployment, production, and other facets of the domestic economy. A balance of trade deficit is often the source of a balance of payments deficit, but other payments can turn a balance of trade deficit into a balance of payments surplus.
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INCOME-EXPENDITURE MODEL: A macroeconomic model, which captures the essence of Keynesian economics, is based on the equality between total income generated from gross domestic product and total expenditures on gross domestic product. The cornerstone of the income-expenditure model is the consumption function, which relates household consumption expenditures to income and gives rise to the aggregate expenditure line with the addition of investment, government purchases, and net exports. The intersection between the aggregate expenditure line at the 45-degree identifies equilibrium. See also | Keynesian economics | consumption function | gross domestic product | aggregate expenditures | multiplier | accelerator | unemployment | business cycle | marginal propensity to consume | fiscal policy | Keynesian cross | income-price model | The General Theory |
Recommended Citation:INCOME-EXPENDITURE MODEL, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 12, 2025].
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INDUSTRY A group of firms producing goods or services that are close substitutes-in-consumption. The similarity of the products makes it possible to analyze the production in a market framework. An industry can be broadly defined, such as the manufacturing industry, or narrowly specified, such as the root beer industry. For most economic analysis the term industry is used interchangeably with the term market.
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More money is spent on gardening than on any other hobby.
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"What gets measured gets done." -- Peter Drucker, educator
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AACT
American Assocation of Commodity Traders
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