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COMPLEX EXPENDITURE MULTIPLIER: The ratio of the change in aggregate output (or gross domestic product) to an autonomous change in an aggregate expenditure (consumption expenditures, investment expenditures, government purchases, or net exports) when all induced components are included in Keynesian analysis. This is the most comprehensive expenditure multiplier possible and includes not only the marginal propensity to consume/save, but also the marginal propensities for government purchases, investment, imports, and taxes. This should be compared with the simple expenditure multiplier that includes only induced consumption

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AGGREGATE EXPENDITURES EQUATION:

An equation that summarizes the four aggregate expenditures on gross domestic product by the four macroeconomic sectors. In the study of Keynesian economics, this equation is commonly used to summarize the demand side of the macroeconomy. The aggregate expenditures equation actually comes in three different versions depending on how many of the four sectors and their expenditures are included.
The aggregate expenditures equation is the sum of the four aggregate expenditures (consumption expenditures, investment expenditures, government purchases, and net exports). This equation provides a short-hand notion that summarizes the demand side of the economy.

The general aggregate expenditures equation is:

AE=C+I+G+(X-M)
where: AE is aggregate expenditures, C is consumption expenditures, I is investment expenditures, G is government purchases, and X-M is net exports, exports (X) minus imports (M).

This particular version of the aggregate expenditures equation is for all four macroeconomic sectors (household sector, business sector, government sector, and foreign sector). In some circumstances reduced versions, with fewer sectors, are more useful. A three-sector version that includes the household, business, and government sectors is:

AE=C+I+G
And the simplest aggregate expenditures equation is for the two private sectors--household and business. It is specified as:
AE=C+I

<= AGGREGATE EXPENDITURES DETERMINANTSAGGREGATE EXPENDITURES LINE =>


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AGGREGATE EXPENDITURES EQUATION, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2022. [Accessed: August 18, 2022].


Check Out These Related Terms...

     | aggregate expenditures line | two-sector aggregate expenditures line | three-sector aggregate expenditures line | four-sector aggregate expenditures line | derivation, aggregate expenditures line | slope, aggregate expenditures line | intercept, aggregate expenditures line | aggregate expenditures determinants | induced expenditures | autonomous expenditures |


Or For A Little Background...

     | macroeconomic sectors | consumption expenditures | investment expenditures | government purchases | net exports | aggregate expenditures | Keynesian economics | macroeconomics | household sector | business sector | government sector | foreign sector | national income | gross domestic product | effective demand | psychological law | consumption line | investment line | government purchases line | net exports line |


And For Further Study...

     | Keynesian model | two-sector Keynesian model | three-sector Keynesian model | four-sector Keynesian model | Keynesian equilibrium | injections-leakages model | two-sector injections-leakages model | three-sector injections-leakages model | four-sector injections-leakages model | aggregate demand | paradox of thrift | fiscal policy | multiplier |


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