Google
Tuesday 
May 11, 2021 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
LAW OF DEMAND: The inverse relationship between demand price and the quantity demanded, ceteris paribus. This fundamental economic principle indicates that as the price of a commodity decreases, then the quantity of the commodity that buyers are able and willing to purchase in a given period of time, if other factors are held constant, increases. This law is incredibly important to the study of economics. If you compiled a top ten list of economically important laws, the law of demand would be right there at the top.

Visit the GLOSS*arama


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 =>


Recommended Citation:

AGGREGATE EXPENDITURES EQUATION, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2021. [Accessed: May 11, 2021].


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 |


Search Again?

Back to the WEB*pedia


APLS

BLACK DISMALAPOD
[What's This?]

Today, you are likely to spend a great deal of time searching the newspaper want ads hoping to buy either storage boxes for your computer software CDs or a set of tires. Be on the lookout for fairy dust that tastes like salt.
Your Complete Scope

This isn't me! What am I?

A lump of pure gold the size of a matchbox can be flattened into a sheet the size of a tennis court!
"Everyone is bound to bear patiently the results of his own example. "

-- Phaedrus, Philosopher

AR
Average Revenue, Autoregressive
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2021 AmosWEB*LLC
Send comments or questions to: WebMaster