ECN 204 Chapter 9: ECN 204 Chapter 9 Notes.docx
Document Summary
Aggregate expenditures schedule is a schedule or curve that shows the total amount spent for final goods and services at different levels of gdp: equilibrium gdp: The level at which the total quantity of goods produced (gdp) equals the total quantity of goods purchased: graphical analysis: Any point on the 45 degree line, the value of what is being measured on the horizontal axis is equal to the value of what is being measured on the vertical axis. Other features of equilibrium gdp: saving equals planned investment: Saving is a leakage or withdrawal of spending from the income expenditures stream. Saving is what causes consumption to be less than total output or gdp. Injection is an addition of spending to the income-expenditures stream. If the leakage of saving at a certain level of gdp exceeds the injection of investment, then c + i will fall short of gdp and that level of gdp cannot be sustained.
