Aggregate expenditure

In economics, aggregate expenditure (AE) is a measure of national income. Aggregate expenditure is defined as the current value of all the finished goods and services in the economy. The aggregate expenditure is thus the sum total of all the expenditures undertaken in the economy by the factors during a given time period. It is the expenditure incurred on consumer goods, planned investment and the expenditure made by the government in the economy. In an open economy scenario, aggregate expenditure also includes the difference between the exports and the imports. In economics, aggregate expenditure (AE) is a measure of national income. Aggregate expenditure is defined as the current value of all the finished goods and services in the economy. The aggregate expenditure is thus the sum total of all the expenditures undertaken in the economy by the factors during a given time period. It is the expenditure incurred on consumer goods, planned investment and the expenditure made by the government in the economy. In an open economy scenario, aggregate expenditure also includes the difference between the exports and the imports. Aggregate expenditures is defined as : AE = C+Ip+G+NX, Aggregate expenditure provides one way to calculate the sum total of all economic activity in an economy, which is referred to as the gross domestic product of an economy. The gross domestic product is calculated through the aggregate expenditure model, also known as the Keynesian cross. AE is also used in the aggregate demand-aggregate supply model which advances the aggregate expenditures model with the inclusion of price changes.