|Author||Topic: macroecomonics, help please on autonomous expenditure definition|
|what is autonomous expenditures? i've never done economics before and tring to get to grasp with it...|
A macroeconomic term used to describe the components of an economy's aggregate expenditure that are not impacted by that same economy's real level of income. This type of spending is considered automatic and necessary, whether occurring at the government level or the individual level. Classical economic theory states that a rise in autonomous expenditures will create at least an equivalent rise in aggregate output (such as GDP), if not a greater rise.
|The sum of Investment, Govt. Purchases and Exports, which does not vary with real GDP is called AUTONOMOUS EXPENDITURE.
So, Autonomous Expenditure = Investment + Govt.Purchase + Exports.
Therefore, it is the level of aggregate planned expenditure when real GDP is zero.
CFA Discussion Topic: macroecomonics, help please on autonomous expenditure definition
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