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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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MULTIPLIER: The cumulatively reinforcing interaction between consumption and production that amplifies changes in investment, government spending, or exports. In other words, if businesses decide to increase investment expenditures on capital goods or if government decides to expand the size of the already bloated federal deficit by spending more on national defense, then our economy's production and income are likely to increase by some multiple of this spending. The amplified increase in production and income, usually from 2 to 5 times, is what gives us the term "multiplier." The process is based on the circular flow idea the people receive income by producing goods and then spend this income on additional production. See also | consumption | production | investment | government purchases | net exports | income | circular flow | Keynesian economics | business cycle | gross domestic product | expansion | contraction | recovery |
Recommended Citation:MULTIPLIER, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 18, 2025].
AmosWEB Encyclonomic WEB*pedia:Additional information on this term can be found at: WEB*pedia: multiplier
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DEADWEIGHT LOSS The decrease in the sum of consumer surplus and producer surplus that results from the imposition of a tax. When a tax drives a wedge between demand price and supply price it disrupts what otherwise would be an efficient market equilibrium. Inefficiency arises because while a portion of the sum of consumer and producer surplus is merely transferred to government, a portion of this sum also disappears. The part that disappears is the deadweight loss and is an indicator of the inefficiency of the tax.
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BEIGE MUNDORTLE
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Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club hoping to buy either a case for your designer sunglasses or arch supports for your shoes. Be on the lookout for crowded shopping malls.
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A thousand years before metal coins were developed, clay tablet "checks" were used as money by the Babylonians.
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"A winner is someone who recognizes his God-given talents, works his tail off to develop them into skills, and uses those skills to accomplish his goals. " -- Larry Bird, basketball player
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