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Aggregate Expenditure
In economics, aggregate expenditure (AE) is a measure of national income. Aggregate expenditure is defined as the current value of all the finished goods and services in the economy. The aggregate expenditure is thus the sum total of all the expenditures undertaken in the economy by the factors during a given time period. It is the expenditure incurred on consumer goods, planned investment and the expenditure made by the government in the economy. In an open economy scenario, aggregate expenditure also includes the difference between the exports and the imports. Aggregate expenditures is defined as AE=C+I_p+G+N_X * C = Household Consumption * I_p = Planned Investment * G = Government spending * N_X = Net exports (Exports − Imports) Aggregate expenditure provides one way to calculate the sum total of all economic activity in an economy, which is referred to as the gross domestic product of an economy. The gross domestic product is calculated through the aggregate expenditure mod ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Measures Of National Income
A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product (GDP), gross national product (GNP), net national income (NNI), and adjusted national income (NNI adjusted for natural resource depletion – also called as NNI at factor cost). All are specially concerned with counting the total amount of goods and services produced within the economy and by various sectors. The boundary is usually defined by geography or citizenship, and it is also defined as the total income of the nation and also restrict the goods and services that are counted. For instance, some measures count only goods & services that are exchanged for money, excluding bartered goods, while other measures may attempt to include bartered goods by ''imputing'' monetary values to them. National accounts Arriving at a figure for the total production of goods and services in a large region like a country entails a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Full Employment
Full employment is a situation in which there is no cyclical or unemployment#Cyclical unemployment, deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely Structural unemployment, structural and Frictional unemployment, frictional, may remain. For instance, workers who are "between jobs" for short periods of time as they search for better employment are not counted against full employment, as such unemployment is frictional rather than cyclical. An economy with full employment might also have unemployment or underemployment where part-time workers cannot find jobs appropriate to their skill level, as such unemployment is considered structural rather than cyclical. Full employment marks the point past which expansionary fiscal and/or monetary policy cannot reduce unemployment any further without causing inflation. Some economists define full employment somewhat differently, as the unemployment rate ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Gross Domestic Product
Gross domestic product (GDP) is a money, monetary Measurement in economics, measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is often revised before being considered a reliable indicator. List of countries by GDP (nominal) per capita, GDP (nominal) per capita does not, however, reflect differences in the cost of living and the inflation, inflation rates of the countries; therefore, using a basis of List of countries by GDP (PPP) per capita, GDP per capita at purchasing power parity (PPP) may be more useful when comparing standard of living, living standards between nations, while nominal GDP is more useful comparing national economies on the international market. Total GDP can also be broken down into the contribution of each industry or sector of the economy. The ratio of GDP to the total population of the region is the GDP per capita, p ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Aggregate Income
Aggregate income is the total of all incomes in an economy without adjustments for inflation, taxation, or types of double counting. Aggregate income is a form of GDP that is equal to Consumption expenditure plus net profits. 'Aggregate income' in economics is a broad conceptual term. It may express the proceeds from total output in the economy for producers of that output. There are a number of ways to measure aggregate income, but GDP is one of the best known and most widely used. Measurement using GDP GDP stands for gross domestic product. GDP is a measure of the economic output of a country. It is usually defined as the total market value of goods and services produced within a given period after deducting the cost of goods and services used up in the process of production, but before allowances for depreciation. Most countries compile estimates of their GDP based on guidelines from the United Nations. GDP (Y) is the sum of consumption (C), investment (I), government spending ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Keynesian Cross And Growth In Expenditure
Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output and inflation. In the Keynesian view, aggregate demand does not necessarily equal the productive capacity of the economy. Instead, it is influenced by a host of factors – sometimes behaving erratically – affecting production, employment, and inflation. Keynesian economists generally argue that aggregate demand is volatile and unstable and that, consequently, a market economy often experiences inefficient macroeconomic outcomes – a recession, when demand is low, or inflation, when demand is high. Further, they argue that these economic fluctuations can be mitigated by economic policy responses coordinated between government and central bank. In particular, fiscal policy actions (taken by the government) and monetary policy actions (tak ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Multiplier (economics)
In macroeconomics, a multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable. For example, suppose variable ''x'' changes by ''k'' units, which causes another variable ''y'' to change by ''M'' × ''k'' units. Then the multiplier is ''M''. Common uses Two multipliers are commonly discussed in introductory macroeconomics. Commercial banks create money, especially under the fractional-reserve banking system used throughout the world. In this system, money is created whenever a bank gives out a new loan. This is because the loan, when drawn on and spent, mostly finishes up as a deposit back in the banking system and is counted as part of money supply. After putting aside a part of these deposits as mandated bank reserves, the balance is available for the making of further loans by the bank. This process continues multiple times, and is called the multiplier effect. The multiplier may v ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Demand-side Economics
Demand-side economics is a term used to describe the position that economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of ... and full employment are most effectively created by high demand for products and services. According to demand-side economics, output is determined by effective demand. High consumer spending leads to business expansion, resulting in greater employment opportunities. Higher levels of employment create a multiplier effect that further stimulates aggregate demand, leading to greater economic growth. Proponents of demand-side economics argue that tax breaks for the wealthy produce little, if any, economic benefit because most of the additional money is not spent on goods or services but is reinvested in an economy with low demand (which makes speculative ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Sticky Prices
Nominal rigidity, also known as price-stickiness or wage-stickiness, is a situation in which a nominal price is resistant to change. Complete nominal rigidity occurs when a price is fixed in nominal terms for a relevant period of time. For example, the price of a particular good might be fixed at $10 per unit for a year. Partial nominal rigidity occurs when a price may vary in nominal terms, but not as much as it would if perfectly flexible. For example, in a regulated market there might be limits to how much a price can change in a given year. If one looks at the whole economy, some prices might be very flexible and others rigid. This will lead to the aggregate price level (which we can think of as an average of the individual prices) becoming "sluggish" or "sticky" in the sense that it does not respond to macroeconomic shocks as much as it would if all prices were flexible. The same idea can apply to nominal wages. The presence of nominal rigidity is an important part of mac ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Keynesian Economics
Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output and inflation. In the Keynesian view, aggregate demand does not necessarily equal the productive capacity of the economy. Instead, it is influenced by a host of factors – sometimes behaving erratically – affecting production, employment, and inflation. Keynesian economists generally argue that aggregate demand is volatile and unstable and that, consequently, a market economy often experiences inefficient macroeconomic outcomes – a recession, when demand is low, or inflation, when demand is high. Further, they argue that these economic fluctuations can be mitigated by economic policy responses coordinated between government and central bank. In particular, fiscal policy actions (taken by the government) and monetary policy actions (t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Invisible Hand
The invisible hand is a metaphor used by the British moral philosopher Adam Smith that describes the unintended greater social benefits and public good brought about by individuals acting in their own self-interests. Smith originally mentioned the term in his work ''Theory of Moral Sentiments'' in 1759, but it has actually become known from his main work ''The Wealth of Nations'', where the word itself is mentioned only once, in connection with import restrictions. Similar ideas had already been presented before Smith by other Enlightenment thinkers, such as Anders Chydenius in his work ''The National Gain'' (1765) and Bernard Mandeville. Liberal thinkers wanted to show that society functions without collapsing even without the old hierarchical order of the feudal era. The concept was first introduced by Adam Smith in ''The Theory of Moral Sentiments'', written in 1759. The exact phrase is used just three times in Smith's writings. Smith may have come up with the two mea ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Gross Domestic Product
Gross domestic product (GDP) is a money, monetary Measurement in economics, measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is often revised before being considered a reliable indicator. List of countries by GDP (nominal) per capita, GDP (nominal) per capita does not, however, reflect differences in the cost of living and the inflation, inflation rates of the countries; therefore, using a basis of List of countries by GDP (PPP) per capita, GDP per capita at purchasing power parity (PPP) may be more useful when comparing standard of living, living standards between nations, while nominal GDP is more useful comparing national economies on the international market. Total GDP can also be broken down into the contribution of each industry or sector of the economy. The ratio of GDP to the total population of the region is the GDP per capita, p ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Factors Of Production
In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, goods and services. The utilized amounts of the various inputs determine the quantity of output according to the relationship called the production function. There are four ''basic'' resources or factors of production: land, labour, capital and entrepreneur (or enterprise). The factors are also frequently labeled "producer goods or services" to distinguish them from the goods or services purchased by consumers, which are frequently labeled "consumer goods". There are two types of factors: ''primary'' and ''secondary''. The previously mentioned primary factors are land, labour and capital. Materials and energy are considered secondary factors in classical economics because they are obtained from land, labour, and capital. The primary factors facilitate production but neither becomes part of the product (as with raw materials) nor becomes significantly tra ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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