ECON 2010 Chapter : Ch 11 Macroeconomic Notes
Document Summary
Chapter 11- aggregate expenditure and output in the short run. Aggregate expenditure (ae)- the total amount of spending in the economy: the sum of consumption, planning investment, government purchases, and net exports. Increase in ae = increase in production of goods: firms will sell about what they expected to, don"t increase or decrease production or the number of workers they hire. Increases in ae > increases in production of goods and services: firms increase production, hire more workers. Increase in ae < increase in production of goods and services: cut back production, lay off workers. Gdp is the value of all of the final good and services produced in an economy during a particular year. Real gdp corrects nominal gdp for the effects of inflation. Ae = c + i + g + nx. The difference between planned investment and actual investment. Inventories- goods that have been produced but not yet sold.
