i came across the equations of Aggregate Demand and Aggregate Expenditure where both AE;AD= C+I+G+(X-M) so my question is: are they both the same or is it just when AD graph and AS graph intersect the intersection point is AE? would you give us an example if it is possible ?

i came across the equations of Aggregate Demand and Aggregate Expenditure where both AE;AD= C+I+G+(X-M) so my question is: are they both the same or is it just when AD graph and AS graph intersect the intersection point is AE? would you give us an example if it is possible ?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter10: Income And Expenditures Equilibrium

Section: Chapter Questions

Problem 17E

See similar textbooks

Related questions

Q: aggregate expenditure line is AE 1. A $10 million increase in planned investment causes aggregate…

A: Option (c).

Q: Refer to the information provided in Figure below to answer the question that follow, AE2 AE, 2,000…

A: Below is the given values: Aggregate expenditure at equilibrium = 2000 Aggregate output at…

Q: "If taxes and government spending are reduced by the same amount, there will be no effect on…

A: The multiplier for expenditures The expenditure multiplier, which depicts how changes in autonomous…

Q: What are the determinants of aggregate demand? How do these determinants differ from the…

A: In economics, aggregate expenditure (AE) is a measure of public pay. Aggregate expenditure is…

Q: AD 45° AD₁ =C+I+G+NX the Pl Y₁ ct of the following on the AD curve and equilibrium output Y. Draw…

A: The total quantity of demand for all completed items and services produced in a given economy is…

Q: An economy is described by the following equations: = 2,000 + 0.5 (Y - T) = 900 IP G = 1,800 NX =…

A: Planned aggregate expenditure is the sum of consumption spending, investment spending, government…

Q: Explain carefully: “A change in the price level shifts the aggregate expenditures curve but not the…

A: Aggregate demand is sum total of goods and services that are actually produced in the market…

Q: ⁢42billion, and spending on imports was $35$⁢35 billion. The price level increases, resulting in a…

A: Given : Consumption spending = $150 billion Investment Spending=$40 billion Government spending=$50…

Q: Why must double counting be avoided when measuring GDP? Provide an elaborate answer with at least…

A: Hi, thank you for the question. As per our Honor code, we are allowed to attempt only the first…

Q: Answer the following questions, which relate to the aggregate expenditures model: Instructions:…

A: Answer: (a). Equilibrium GDP=Ca+Ig+G+XnEquilibrium GDP=110+50+30+-10Equilibrium GDP=$180 Equilibrium…

Q: Illustrate how the information from the Income-Expenditure model is embedded in the Aggregate Demand…

A: Real output is the value of goods produced in the economy excluding the price change in a given time…

Q: How does a change in the interest rate affect aggregate investment ? What if firms prefer to pay for…

A: Hello. Since you have posted multiple questions and not specified which question needs to be solved,…

Q: If some non-price level determinant causes total spending to decrease, what will the effect on…

A: In macroeconomics, economic fluctuations are generally studied using the concepts of aggregate…

Q: Use the Keynesian cross to predict the impact on equilibrium GDP of the following. In each case,…

A: a. An increase in government purchases : Direction of the change : Demand curve will shift to the…

Q: If economists forecast a decrease in aggregate expenditure, which of the following is likely to…

A: Aggregate expenditure is the overall spending generated by forces in the market for a given period.

Q: Please show in two side by side graphs the connection between the multiplier and the AE curve…

A: Aggregate expenditure is teh total demand or summation of consumption , investment , government…

Q: Using the income-expenditure model, what is the expected effect (increase, decrease, or no effect)…

A: Income-expenditure method: It refers to the model under which the fluctuations and spending are…

Q: Answer the following questions, which relate to the aggregate expenditures model: a. If C is £100, I…

A: In financial matters, aggregate expenditure is a proportion of public pay. Aggregate expenditure is…

Q: Match the following terms with their notations. Marginal Propensity to Consumer Choose.. Marginal…

A: Since you have posted multiple questions as per the guidelines we can solve the only the first…

Q: What will be the short-run effect of the shift in the reaction function on GDP?Describe briefly how…

A: The reaction-function of the central-bank is the function showing how the central-bank changes the…

Q: Which equation represents the macroeconomic equilibrium condition in the aggregate expenditure (AE)…

A: Investment comprises of the following three components: a) Demand for new capital goods by business…

Q: The introduction of taxes and imports into the Aggregate Expenditure model leads the AE line to…

A: Aggregate Expenditure is the value of goods and services in the economy. AE=C+I+G+NX which gives…

Q: examples for the determinants of the consumption element of Aggregate Demand. (Examples are crucial…

A: Consumption is one of the elements of the aggregate demand of a country. It further includes various…

Q: Derive the consumption function and use this relation in the aggregate demand function to derive an…

A: Consumption function shows the relationship between expenditure done by an individual and one's own…

Q: If aggregate expenditure is greater than real GDP, we could expect which of the following to occur?…

A: Aggregate expenditure(AE) is the value of the finished goods and services in the economy. It…

Q: When aggregate production is less than aggregate expenditures, the economy is in equilibrium. O…

A: In an economy, when analyzing the Keynesian model, it can be seen that the equilibrium will be the…

Q: What is the difference between aggregate expenditure and aggregate demand? Why is the aggregate…

A: Aggregate expenditure may increase with increase in proce. Aggregate demand may be having inverse…

Q: Scenario 34-2. The following facts apply to a small, imaginary economy. • Consumption spending is…

A: Crowding out is a situation that occurs when an increased interest rate leads to a decrease in…

Q: Calculate aggregate demand if consumption expenditure is $2300 million and the investment…

A: The given information is as follows:- Consumption in the economy = $2300 million Investment…

Q: The expenditure schedule and the aggregate demand curve show much the same thing, with one crucial…

A: The expenditure schedule is the component of the aggregate demand. The impact of change in price…

Q: The economy is in equilibrium such that Planned Aggregate Expenditure (AE) = Aggregate Output (Y) =…

A: The aggregate demand which would be equal to the output would result in macroeconomic equilibrium…

Q: An economy is described by the following equations: C= 1500 + 0.75(Y - T) po = 800 G= 1500 X = 100…

Q: the question is true or false: "An increase in business investment spending has the same effect on…

A: Aggregate demand is the total quantity of commodities that the consumers are willing to buy at…

Q: Consider the Aggregate Expenditure Model. When the real interest rate falls, the AE Line will shift…

A: Equilibrium occurs when aggregate expenditure curve intersects 45 degree line. It is comprised of…

Q: Answer the following questions, which relate to the aggregate expenditures model: Instructions:…

A: The current valuation of the goods and also of the services that are finished in an economy is done…

Q: If the aggregate expenditure line shifts in response to a decrease in real wealth, describe the…

A: Planned aggregate expenditure refers to the sum of expenditure on consumption, investment,…

Q: If the aggregate expenditure line shifts in response to an increase in real wealth, describe the…

Question

100%

i came across the equations of Aggregate Demand and Aggregate Expenditure where both AE;AD= C+I+G+(X-M)

so my question is: are they both the same or is it just when AD graph and AS graph intersect the intersection point is AE?

would you give us an example if it is possible ?

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Name some factors that could cause the SRAS curve to shift, and say whether they would shift SRAS to the right or to the left.
Which equation represents the macroeconomic equilibrium condition in the aggregate expenditure (AE) model?
Using a macroeconomics demand/supply analysis, where do you think current output is relative to what the economy is capable of producing? Look at recent trends in the data. What are the recent trends in the components of aggregate demand (consumption spending, investment spending, government purchases, and exports and imports?
what is The Aggregate Expenditure Model
The following are variables that may cause shifting of aggregate demand (AD) curve. Discuss the effect of increasing these variables to the aggregate demand. Use graphical approach to demonstrate the effect of increasing of each variable and explain why the AD curve shifted. a) Government expenditure (domestic)
An economy is described by the following equations: C= 1500 + 0.75(Y - T) po = 800 G= 1500 X = 100 M=0 T=1500 †=0 Y* = 12000 a) Find a numerical equation linking planned aggregate expenditure to output. b) Find its exogenous expenditure and induced expenditure in this economy
The Aggregate Expenditure Model is traditionally called the” Keynesian Cross”. Use the Aggregate Expenditure Keynesian Cross diagram to show what happens to the economy under the following conditions: (Note that is different from the AS-AD Model.) What happens in the model if government expenditures are increased (G↑)? What happens if taxes are raised (T↑)? What happens to the US economy if the rest of the world experiences economic growth and imports more US goods (X↑)?
What are the determinants of aggregate demand? How do these determinants differ from the determinants of aggregate expenditure? What is the significance, if any, of these differences?
What does it mean when the aggregate expenditure line crosses the 45-degree line? In other words, how would you explain the intersection in words?
Suppose that the price level is constant and that investment decreases sharply. How would you show this decrease in the aggregate expenditures model? What would be the outcome for real GDP? How would you show this fall in investment in the aggregate demand–aggregate supply model, assuming the economy is operating in what, in effect, is a horizontal section of the aggregate supply curve?
the question is true or false: "An increase in business investment spending has the same effect on the level of ad as an increase in the same amount of government spending" can you explain what the answer is? Would they equal each other out?
suppose there is a permanent upward shift of the Federal Reserve’s reaction function.What will be the short-run effect of the shift in the reaction function on GDP?Describe briefly how GDP returns to its potential level.