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AS: The abbreviaion for aggregate supply, which is the total (or aggregate) real production of final goods and services available in the domestic economy at a range of price levels, during a given time period. Aggregate supply (AS) is one half of the aggregate market analysis; the other half is aggregate demand. Aggregate supply, relates the economy's price level, measured by the GDP price deflator, and aggregate domestic production, measured by real gross domestic product. The aggregate supply relation is generally separated into long-run aggregate supply, in which all prices and wages and flexible and all markets are in equilibrium, and short-run aggregate supply, in which some prices and wage are NOT flexible and some markets are NOT in equilibrium.
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INTERCEPT, NET EXPORTS LINE: The intercept of the net exports line indicates autonomous net exports, net exports that do not depend on the level of domestic income or production. This can be thought of as net exports, exports minus imports, that the foreign sector undertakes regardless of the state of the economy. Autonomous net exports are affected by the net exports determinants, which cause a change in the intercept and a shift of the net exports line. Net Exports Line |
| The net exports line shows the relation between net exports undertaken by the foreign sector and domestic aggregate income or production. The income and production measures commonly used are national income and gross domestic product.A representative net exports line is presented in the exhibit to the right. This red line, labeled X-M in the exhibit, is negatively sloped, indicating that greater levels of income generate greater net exports by the foreign sector. This negative relation indicates that imports, which are subtracted from exports to derived net exports, are induced by an expanding economy. The net exports line graphically illustrates the net exports-income relation for the foreign sector, which is then added to the consumption line to derive the aggregate expenditures line used in Keynesian economics to identify equilibrium income and production. The intercept of the net exports line indicates the intersection point between the net exports line and the vertical net exports axis. The net exports line intersects the vertical axis at a value of $1 trillion. Theoretically, this is a minimum "baseline" level of net exports, the amount of net exports undertaken if aggregate income falls to zero. It generally includes both autonomous exports and autonomous imports. This intersection indicates autonomous net exports--net exports unrelated to income. Click the [Intercept] button to illustrate. Autonomous net exports are net exports by the foreign sector that are unrelated to and unaffected by the level of income or production. This is best indicated by a zero level of income. For the aggregate economy autonomous net exports are mostly an unlikely theoretical extrapolation. However, from an analytical perspective, the intercept of the net exports line is affected by the net exports determinants. These are ceteris paribus factors other than income that affect net exports, but which are held constant when the net exports line is constructed. Any change in these determinants cause the net exports line to shift, which necessarily means a new intercept and a new level of autonomous net exports.
Recommended Citation:INTERCEPT, NET EXPORTS LINE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: December 7, 2024]. Check Out These Related Terms... | | | | | | | | | | Or For A Little Background... | | | | | | | | | | | And For Further Study... | | | | | | | | | | | | | | | |
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Ragnar Frisch and Jan Tinbergen were the 1st Nobel Prize winners in Economics in 1969.
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"If you don't know where you are going, any road will get you there." -- Lewis Carroll, writer
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NELS National Educational Longitudinal Survey
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