the ratio of the change in income to the change in exports and investment is?
Answers
Answer:
The aggregate expenditure is the sum of all the expenditures undertaken in the economy by the factors during a specific time period. The equation is: AE = C + I + G + NX.
The aggregate expenditure determines the total amount that firms and households plan to spend on goods and services at each level of income.
The aggregate expenditure is one of the methods that is used to calculate the total sum of all the economic activities in an economy, also known as the gross domestic product ( GDP ).
When there is excess supply over the expenditure, there is a reduction in either the prices or the quantity of the output which reduces the total output (GDP) of the economy.
When there is an excess of expenditure over supply, there is excess demand which leads to an increase in prices or output (higher GDP).