a little less than the girl next door (in_transit) wrote,
a little less than the girl next door
in_transit

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interest seems to have come too late

my intended answer: C + G + I + (X - M) = AE


but according to gf stanlake's introductory economics,

  • C + G + I + (X - M) = AD

  • AD = AE (theoretically, according to senny)

  • aggregate demand (AD) is total planned spending at a given price level. ... total spending can also be considered in relation to income. it is then called aggregate expenditure (AE)... (stanlake)

    ==> C + G + I + (X - M) = AE (it's a derivation!)
  • Y = AE (somehow, in vague memory of macro one notes, i think)

  • and that's probably where the 45 degrees line and all that shit comes in lah...


but then next chapter, stanlake says, aggregate demand is the amount which will be spent at different values of the price level.

and this place tells us that we use the term aggregate expenditure (AE) when it is assumed that the price level is held constant. ... so does that mean aggregate demand (AD) isn't held at constant price level?

whew! so much for posting smart-alecky entries like that hor... anyway, thanks to all who offered suggestions, input and whatnot. now, maybe you all can correct any misconceptions and set me back on track... 'tho i don't have much need to further research into econs lah. hee~ leong would faint!

C -- Consumption
G -- Government spending
I -- Investment
(X - M) -- net eXports; eXports minus iMports
Y -- real income (or something like that)
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