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AGGREGATE EXPENDITURES 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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INJECTION LINE: A line used in the injection-leakage model representing the relation between non-consumption expenditures (that is, injections) and national income. The three injections are investment expenditures, government purchases, and exports. The foundation of the injection line is the investment line, which is then enhanced by adding government purchases and exports. The other part of the injection-leakage model is a line representing leakages. The intersection of the injection and leakage lines identifies equilibrium aggregate output, or Keynesian equilibrium.

     See also | injection | injection-leakage model | leakage | investment expenditures | government purchases | export | investment line | leakage line | Keynesian equilibrium | aggregate output |


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PLANNING HORIZON

Another term for the long-run average cost curve. The long-run average cost curve is termed the planning horizon or planning curve because it provides information that a firm can use to plan factory construction and expansion in the long run.

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