Short-Term Economic Fluctuations - Short-term equilibrium output
3 important questions on Short-Term Economic Fluctuations - Short-term equilibrium output
We can define total autonomous expenditures, denotes by ā, as:
The Keynesian cross shows graphically:
- a 45 degrees line representing the equation Y = PAE
- the expenditure line, showing the relationship between planned aggregate expenditure PAE and output Y
The marginal propensity to import is:
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