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What is difference between Autonomous Expenditure and Induced Expenditure?
AUTONOMOUS AND INDUCEDEXPENDITURE :Autonomous expenditure is independent ofchanges in real GDP, whereas induced expenditurevaries as real GDP changes. In general, a change inautonomous expenditure creates a change in realGDP, which in turn creates a change in inducedexpenditure. The induced changes are at the heartof the multiplier effect.Induced expenditure is the sum of the componentsof aggregate expenditure that change withGDP.♦ Autonomous expenditure is the sum of the componentsof aggregate expenditure that do notchange when real GDP changes.
What happens when aggregate planned expenditure exceeds real GDP?
If aggregate planned expenditure exceed real GDP, firms sell more than they planned to sell and end up with inventories being too low. vice versa if aggregate planned expenditure is less than real GDP, firms sell lessthan they planned to sell and end up with unplanned inventories.
What factors change and what factors remain the same when there is a movement along the aggregate demand curve?
The aggregate demand curve shows the relationship between the quantity of real GDP demanded and the price level when other influences on expenditure plans remain the same. When there is a movement along the aggregate demand curve, the price level changes and other factors such as expectations, fiscal and monetary policy, and the world economy remain the same
In the keynesian model of aggregate expenditure real GDP is determined by what?
The aggregate expenditure model relates aggregate expenditures, which is the sum of planned level of consumption + investment + government purchases + net exports at a given price level, to the level of GDP. The key word here is planned. GDP is the same as aggregate expenditures(AE) except for one difference. People, firms and governments don't always spend what they had planned. So AE differs from GDP in that it deals exclusively with amounts firms intend to invest, and not necessarily taking into account amounts that will actually be invested as in GDP Where GDP is defined as C + I + G + NX and I = Ip + Iu (planned + unplanned investment), Aggregate Expenditures is defined as C + Ip + G + NX. AE (Aggregate Expenditure) is used in conjunction with GDP in the Aggregate Expenditures Model to predict future GDP direction. In this model, when AE = GDP then the economy is in equilibrium. According to this model an economy will move towards its equilibrium causing changes in the GDP.
What will happen to the equilibrium price level and the real GDP if the aggregate demand decreases and aggregate supply decreases?
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
What is difference between Autonomous Expenditure and Induced Expenditure?
AUTONOMOUS AND INDUCEDEXPENDITURE :Autonomous expenditure is independent ofchanges in real GDP, whereas induced expenditurevaries as real GDP changes. In general, a change inautonomous expenditure creates a change in realGDP, which in turn creates a change in inducedexpenditure. The induced changes are at the heartof the multiplier effect.Induced expenditure is the sum of the componentsof aggregate expenditure that change withGDP.♦ Autonomous expenditure is the sum of the componentsof aggregate expenditure that do notchange when real GDP changes.
What happens when aggregate planned expenditure exceeds real GDP?
If aggregate planned expenditure exceed real GDP, firms sell more than they planned to sell and end up with inventories being too low. vice versa if aggregate planned expenditure is less than real GDP, firms sell lessthan they planned to sell and end up with unplanned inventories.
What factors change and what factors remain the same when there is a movement along the aggregate demand curve?
The aggregate demand curve shows the relationship between the quantity of real GDP demanded and the price level when other influences on expenditure plans remain the same. When there is a movement along the aggregate demand curve, the price level changes and other factors such as expectations, fiscal and monetary policy, and the world economy remain the same
What is the aggregate expenditure function in terms of income?
the function that represents total spending in an economy at a given level of real disposable income.
What has the author R Gausden written?
R. Gausden has written: 'The importance of income volatility in forecasting aggregate consumers' expenditure in the U.K' 'Real wages and employment'
The short term aggregate supply curve represents the relationship between what?
The short term aggregate supply curve represents the relationship between the price level and the quantity of real GDP that firms are willing to supply in the economy. It shows the level of output that firms can produce in the short run at different price levels.
Is the relationship between Selena Gomez and Justin bieber real?
yes the relationship between Justin and Selena is real!!!!!!
In the keynesian model of aggregate expenditure real GDP is determined by what?
The aggregate expenditure model relates aggregate expenditures, which is the sum of planned level of consumption + investment + government purchases + net exports at a given price level, to the level of GDP. The key word here is planned. GDP is the same as aggregate expenditures(AE) except for one difference. People, firms and governments don't always spend what they had planned. So AE differs from GDP in that it deals exclusively with amounts firms intend to invest, and not necessarily taking into account amounts that will actually be invested as in GDP Where GDP is defined as C + I + G + NX and I = Ip + Iu (planned + unplanned investment), Aggregate Expenditures is defined as C + Ip + G + NX. AE (Aggregate Expenditure) is used in conjunction with GDP in the Aggregate Expenditures Model to predict future GDP direction. In this model, when AE = GDP then the economy is in equilibrium. According to this model an economy will move towards its equilibrium causing changes in the GDP.
What will happen to the equilibrium price level and the real GDP if the aggregate demand increases and aggregate supply decreases?
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
What will happen to the equilibrium price level and the real GDP if the aggregate demand decreases and aggregate supply increases?
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
What will happen to the equilibrium price level and the real GDP if the aggregate demand decreases and aggregate supply decreases?
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
Why is it necessary to distinguish between capital and revenue expenditure?
Then only they find the real profit or loss and financial position of the businessBecause the capital expenditure will take place to Balance sheet and revenue expenditure will go to profit and loss account. Capital expenditure also called asset of the business. These expenditure also called non-recurring nature expenses.Revenue expenditure also called recurring nature expenses.
