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{{Unreferenced|date=February 2009}}
In economics, '''Aggregate Expenditure''' is a [[measures of national income|measure of national income]].<ref>{{cite book|last=Trosten|first=Jochem|title=Macro-recitation|year=2009|pages=2–7|url=http://www.torstenjochem.de/macro101/07_Measuring_GDP.pdf}}</ref> Aggregate Expenditure is defined as the current value of all the finished goods and services in the economy.<ref>{{cite web|last=Haworth|first=Barry|title=The Aggregate Expenditure Model|url=http://econpage.com/202/handouts/AEmodel/index.html|work=The Aggregate expenditure model|publisher=University of Louisville|accessdate=13 November 2011}}</ref> 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 refers to the expenditure incurred on consumer goods, planned investment (or savings) and in the Keynesian model also includes the expenditure made by the government in the economy. In an open economy scenario, the aggregate expenditure also includes the difference between the exports and the imports.


The '''nuclear magnetic moment''' is the [[magnetic moment]] of an [[atomic nucleus]] and arises from the [[Spin_(physics)|spin]] of the [[proton]]s and [[neutron]]s. It is mainly a magnetic dipole moment; the [[quadrupole moment]] does cause some small shifts in the [[hyperfine structure]] as well.
Aggregate Expenditures is defined as 
: <math>AE = C+I+G</math>,
here,
* C  = Household Consumption
* I<sub>p</sub>  = Planned Investment
* I<sub>u</sub>  = Unplanned Investment
* G  = Government spending
* Xn = Net exports (Exports-Imports)


The nuclear magnetic moment varies from [[isotope]] to isotope of an [[Chemical element|element]]. It can only be zero if the numbers of protons and of neutrons are ''both'' even.
Aggregate Expenditure is one of the methods to calculate the sum total of all economic activities in an economy which is referred to as the Gross Domestic product of an economy. The gross domestic product which is an important measure of the growth of the economy is calculated through the [[Keynesian cross|Aggregate expenditure model]] also known as the [[Keynesian cross]].AE is also used in the [[Aggregate demand|Aggregate Demand]]-[[Aggregate supply|Aggregate Supply]] Model which advances the Aggregate Expenditures Model with the inclusion of Price changes.


==Shell model==
Components of '''Aggregate Expenditure''' (AE) - defined as the total amount that firms and households plan to spend on goods and services at each level of income. Also, it can be seen that the aggregate expenditure is the sum of expenditures on consumption, investment, government expenses and net exports.  It is normally derived from all the components of the [[Aggregate Demand]]. Aggregate demand (AD) refers to the sum total of goods that are demanded in an economy over a period and thus AD is defined by the planned total expenditure in an economy for a given price level.
According to the [[shell model]], [[proton]]s or [[neutron]]s tend to form pairs of opposite [[total angular momentum]]. Therefore the magnetic moment of a nucleus with even numbers of both protons and neutrons is zero, while that of a nucleus with an odd number of protons and even number of neutrons (or vice versa) will have to be that of the "last", unpaired proton (or neutron). For a nucleus with odd numbers of both protons and neutrons, the total magnetic moment will be some combination of the magnetic moments of both of the "last", unpaired proton and neutron.


Nuclear magnetic moment is only partly predicted by simple versions of the [[shell model]]. The magnetic moment is calculated through ''j'', ''l'' and ''s'' of the "last" nucleon, but nuclei are not in states of well defined ''l'' and ''s''. Furthermore, for [[odd-odd nuclei]], one has to consider the two "last" [[nucleon]]s, as in [[Deuterium#Magnetic_and_electric_multipoles|deuterium]]. Therefore there are several possible answers for the nuclear magnetic moment, one for each possible combined ''l'' and ''s'' state, and the real state of the nucleus is a [[Superposition principle|superposition]] of them. Thus the real (measured) nuclear magnetic moment is somewhere in between the possible answers.
==Components of AE==
Various school of thoughts use various components to come up with the Aggregate Expenditure. The major school of economic thoughts which are the classical and Keynesian economists use the following components:


==g-factors==
*Consumption expenditure (C)'''
The values of g<sup>(l)</sup> and g<sup>(s)</sup> are known as the [[g-factor (physics)|g-factor]]s of the [[nucleon]]s.
Consumption refers to the household consumption over a given period of time. The total household consumption can be divided into two parts, they are: Autonomous Consumption and Induced consumption. [[Autonomous consumption|Autonomous Consumption]] refers to the amount of consumption regardless of the amount of income, hence, even if the income is zero, the autonomous consumption would be the total consumption. [[Induced consumption]] refers to the level of consumption dependent on the level of income.<ref>{{cite book|last=Rittenberg,  Tregarthen|first=Libby,Timothy|title=Principles of Macroeconomics|url=http://www.flatworldknowledge.com/node/30043#web-30043}}</ref>


The measured values of g<sup>(l)</sup> for the [[neutron]] and the [[proton]] are according to their [[electric charge]]. Thus, in units of [[nuclear magneton]], g<sup>(l)</sup> = 0 for the [[neutron]] and g<sup>(l)</sup> = 1 for the [[proton]].
C = C<sub>a</sub> + MPC (Y)
* C<sub>a</sub> = Autonomous Consumption
* MPC            = Marginal Propensity to Consume
* Y              = Income


The measured values of g<sup>(s)</sup> for the [[neutron]] and the [[proton]] are twice their magnetic moment (either the [[neutron magnetic moment]] or the [[proton magnetic moment]]). In [[nuclear magneton]] units, g<sup>(s)</sup> = -3.8263 for the [[neutron]] and g<sup>(s)</sup> = 5.5858 for the [[proton]].
*Investment (I)'''
Investment is the amount of expenditure towards the capital goods. Investment refers to the expenditure towards goods that are expected to yield a return or increase their own value over time. The investment expenditure can be further divided into two parts, planned investment and unplanned investment. Over the long run the sum of differences in the unplanned investment would equal to zero as economy approaches equilibrium.
'''


==Calculating the magnetic moment==
*Government Expenditure:(G)'''
In the [[shell model]], the magnetic moment of a nucleon of [[total angular momentum]] ''j'', [[orbital angular momentum]] ''l'' and [[Spin (physics)|spin]] ''s'', is given by
The Keynesian model propagates an active state to control and regulate the economy. The government can make expenditure in terms of infrastructure or through transfers and thus increase the total expenditure in the economy as advocated by Keynes.
:<math>\mu=\langle(l,s),j,m_j=j|\mu_z|(l,s),j,m_j=j\rangle</math>


By projecting with the [[total angular momentum]] '''j''' we get
*Net Exports:(NX)'''
<math>\mu=\langle(l,s),j,m_j=j|\overrightarrow{\mu}\cdot \overrightarrow{j}|(l,s),j,m_j=j\rangle \frac{\langle (l,s)j,m_j=j|j_z|(l,s)j,m_j=j\rangle}{\langle (l,s)j,m_j=j|\overrightarrow{j}\cdot \overrightarrow{j}|(l,s)j,m_j=j\rangle}</math>
In an open economy, the total expenditure of the economy also includes the components of the net exports which is the total exports minus the total imports.<ref>{{cite web|title=Components of Aggregate Expenditure|url=http://su-bc.org/PDF/tutorials/ECN112.pdf|work=Stirling University|accessdate=13 November 2011}}</ref>
<math>= {1\over (j+1)}\langle(l,s),j,m_j=j|\overrightarrow{\mu}\cdot \overrightarrow{j}|(l,s),j,m_j=j\rangle</math>


<math>\overrightarrow{\mu}</math> has contributions both from the [[orbital angular momentum]] and the [[Spin (physics)|spin]], with different coefficients g<sup>(l)</sup> and g<sup>(s)</sup>:
==Classical Economics==
:<math>\overrightarrow{\mu} = g^{(l)}\overrightarrow{l} + g^{(s)}\overrightarrow{s} </math>
by substituting this back to the formula above and rewriting
:<math>\overrightarrow{l}\cdot\overrightarrow{j} = {1\over 2} \left(\overrightarrow{j}\cdot \overrightarrow{j} + \overrightarrow{l}\cdot \overrightarrow{l} - \overrightarrow{s}\cdot \overrightarrow{s}\right)</math>
:<math>\overrightarrow{s}\cdot\overrightarrow{j} = {1\over 2} \left(\overrightarrow{j}\cdot \overrightarrow{j} - \overrightarrow{l}\cdot \overrightarrow{l} + \overrightarrow{s}\cdot \overrightarrow{s}\right)</math>


<math>\mu = {1\over (j+1)}\langle(l,s),j,m_j=j|(g^{(l)}{1\over 2} \left(\overrightarrow{j}\cdot \overrightarrow{j} + \overrightarrow{l}\cdot \overrightarrow{l} - \overrightarrow{s}\cdot \overrightarrow{s}\right) + g^{(s)}{1\over 2} \left(\overrightarrow{j}\cdot \overrightarrow{j} - \overrightarrow{l}\cdot \overrightarrow{l} + \overrightarrow{s}\cdot \overrightarrow{s}\right)|(l,s),j,m_j=j\rangle </math>
Classical economists relied on the [[Say's law]] which states that supply creates its own demand, which stemmed from the belief that wages,prices and interest rates are all flexible.<ref>{{cite book|last=Byrns|title=Student Guide for Learning Contemporary Economics|pages=127|url=http://www.unc.edu/depts/econ/byrns_web/PrinEcon/SG/SVE_SG-27.pdf}}</ref> This comes from the classical thought that the factor payments which are made to the various [[factors of production]] during the production process, would create enough income in the economy to create a demand for the products produced.[[File:Classical aggregate expenditure.png|thumb|Classical Aggregate Expenditure]]
<math>=
This supports the classical thought which revolves around Adam Smith's [[invisible hand]] which states that the markets would achieve equilibrium via the market forces that impact economic activity and thus there is no need for government intervention.Moreover, the classical economists believed that the economy was operating at a [[full employment]] Hence the classical Aggregate expenditure model is:<ref>{{cite book|last=Burnette|first=Jeffery|title=Classical Economics- Principles of Micro|publisher=Rochester Institute of Technology|pages=9|url=http://people.rit.edu/jdbgse/Documents%20402/CN_intromacro_3.pdf}}</ref>
{1\over (j+1)}\left(g^{(l)}{1\over 2} \left(j(j+1) + l(l+1) - s(s+1)\right) + g^{(s)}{1\over 2} \left(j(j+1) - l(l+1) + s(s+1)\right)\right)</math>


For a single [[nucleon]] ''s'' =1/2. For <math>j = l+1/2</math> we get
Aggregate Expenditure = Aggregate Consumption + Planned Investment
:<math>\mu_j = g^{(l)} l + {1\over 2}g^{(s)}</math>


and for <math>j = l-1/2</math>
Therefore,
:<math>\mu_j = {j \over j+1} \left( g^{(l)} (l+1) - {1\over 2}g^{(s)} \right)</math>


== See also ==
<math> --~~~~AE = C + I </math>
* [[Gyromagnetic ratio]]
* [[Nuclear magneton]]
* [[Magnetic moment]]
* [[Neutron magnetic moment]]
* [[Electron magnetic dipole moment]]
* [[Deuterium#Magnetic_and_electric_multipoles|Deuterium magnetic moment]]


== External links ==
Where,
* [[Image:Queryensdf.jpg]] '''[http://www-nds.iaea.org/queryensdf Nuclear Structure and Decay Data - IAEA ]''' with query on Magnetic Moments
*C= Consumption Expenditure
* '''[http://magneticmoments.info/wp magneticmoments.info/wp]''' A blog with all recent publications on electromagnetic moments in nuclei
*I = Aggregate investment ( Savings = Investment<ref>{{cite book|last=Burnette|first=Jeffery|title=Classical Economics- Principles of Micro|publisher=Rochester Institute of Technology|pages=9|url=http://people.rit.edu/jdbgse/Documents%20402/CN_intromacro_3.pdf}}</ref>)


[[Category:Magnetism]]
Classical economics has been criticized for its assumptions that the economy works on a full-employment equilibrium which is a false assumption as in reality, the economy operates at an under-employment equilibrium which provides the foundation for the Keynesian model of Aggregate Expenditure.
[[Category:Nuclear physics]]


[[es:Momento magnético nuclear]]
==Keynesian Economics==
[[eu:Momentu magnetiko nuklear]]
[[Keynesian Economics]] believes, contrary to the classical thought that the Wages, Prices and interest rates are not flexible and hence violating Say's Law, which provided the foundation for the maxim that "supply creates its own demand". Keynes believed that the economy was subject to [[Sticky Prices]] and thus the economy was not in a state of perpetual equilibrium and also operated at an under-employment equilibrium. [[File:Keynesian aggregate expenditure.png|thumb|Keynesian aggregate expenditure]] Keynesian economics calls for a government intervention and is called demand side economics as it believes that aggregate demand and not the aggregate supply determines the GDP because of the difference between the Aggregate Supply and Planned expenditure in an economy.Hence Keynes believed that the government played an important role in the determination on the Aggregate Expenditure in an economy and was thus included Government Expenditure in the Aggregate Expenditure Function.
[[ml:അണുകേന്ദ്ര-അഘൂർണം]]
 
[[sr:Нуклеарни магнетни момент]]
Hence,
 
* <math> --~~~~AE = C+I+G+NX </math>
 
Where,
 
* C = Household Consumption Expenditure
* I = Investment (Planned)
* G = Government Expenditure
* NX= Net Exports ( Exports - Imports )
 
Keynesian economics preaches that in times of a recession, the government must undertake the expenditure to compensate for the lack in the components of Household expenditure (C) and private investment (I) so as to ensure that the demand is maintained in the markets. This also leads to the [[Multiplier (economics)|Keynesian Multiplier]] which suggests that every dollar spent on investment creates a multiplier effect and leads to an increased expenditure of more than one dollar.
 
==Aggregate Expenditure and Aggregate Supply==
[[File:Keynesian cross and growth in expenditure.png|thumb|effect of increase in expenditure]]
An economy is said to be in an equilibrium when aggregate expenditure is equal to the aggregate supply (production) in the economy. According to Keynes, the economy does not stay in a perpetual state of equilibrium but the Aggregate expenditure and Aggregate Supply adjust each other towards equilibrium.  When there is an excess supply over the expenditure and hence the demand there is an inventory leftover with the producers, which leads to a reduction in either the prices or the quantity of output and hence reducing the total output (GDP) of the economy. On the other hand, if there is an excess of expenditure over supply, then there is excess demand leading to an increase in prices or output. Hence the economy constantly keeps shifting between excess supply ( inventory ) and excess demand. Thus, the economy is constantly moving towards an equilibrium between the aggregate expenditure and aggregate supply.<ref>{{cite book|last=Branson|first=William|title=Macroeconomic theory and policy|year=1979}}</ref> In an under-employment equilibrium the Keynesian Cross refers to the point of intersection of the Aggregate Supply and the Aggregate Expenditure curve. The rise in the expenditure by either Consumption (C), Investment (I) or the Government (G) or an increase in the exports or a decrease in the imports leads to a rise in the aggregate expenditure and thus pushes the economy towards a higher equilibrium and thus reaching a higher level towards the potential of the GDP.<ref>{{cite web|title=Aggregate Expenditure|url=http://www.murraylax.org/eco120/notes/keynesian.pdf|work=Keynesian Model|accessdate=13 November 2011}}</ref>
 
==See also==
* [[Aggregate income]]
* [[Aggregate demand]]
 
==References==
{{Reflist}}
{{Refbegin}}
*Parry G., and Kemp S., (2009) Discovering Economics Tactic Publications, South Perth.
{{Refend}}
 
{{DEFAULTSORT:Aggregate Expenditure}}
[[Category:Income]]
[[Category:Macroeconomic aggregates]]

Revision as of 01:44, 14 August 2014

In economics, Aggregate Expenditure is a measure of national income.[1] Aggregate Expenditure is defined as the current value of all the finished goods and services in the economy.[2] 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 refers to the expenditure incurred on consumer goods, planned investment (or savings) and in the Keynesian model also includes the expenditure made by the government in the economy. In an open economy scenario, the aggregate expenditure also includes the difference between the exports and the imports.

Aggregate Expenditures is defined as

,

here,

  • C = Household Consumption
  • Ip = Planned Investment
  • Iu = Unplanned Investment
  • G = Government spending
  • Xn = Net exports (Exports-Imports)

Aggregate Expenditure is one of the methods to calculate the sum total of all economic activities in an economy which is referred to as the Gross Domestic product of an economy. The gross domestic product which is an important measure of the growth of the economy 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.

Components of Aggregate Expenditure (AE) - defined as the total amount that firms and households plan to spend on goods and services at each level of income. Also, it can be seen that the aggregate expenditure is the sum of expenditures on consumption, investment, government expenses and net exports. It is normally derived from all the components of the Aggregate Demand. Aggregate demand (AD) refers to the sum total of goods that are demanded in an economy over a period and thus AD is defined by the planned total expenditure in an economy for a given price level.

Components of AE

Various school of thoughts use various components to come up with the Aggregate Expenditure. The major school of economic thoughts which are the classical and Keynesian economists use the following components:

  • Consumption expenditure (C)

Consumption refers to the household consumption over a given period of time. The total household consumption can be divided into two parts, they are: Autonomous Consumption and Induced consumption. Autonomous Consumption refers to the amount of consumption regardless of the amount of income, hence, even if the income is zero, the autonomous consumption would be the total consumption. Induced consumption refers to the level of consumption dependent on the level of income.[3] 

C = Ca + MPC (Y)
  • Ca = Autonomous Consumption
  • MPC = Marginal Propensity to Consume
  • Y = Income
  • Investment (I)

Investment is the amount of expenditure towards the capital goods. Investment refers to the expenditure towards goods that are expected to yield a return or increase their own value over time. The investment expenditure can be further divided into two parts, planned investment and unplanned investment. Over the long run the sum of differences in the unplanned investment would equal to zero as economy approaches equilibrium.

  • Government Expenditure:(G)

The Keynesian model propagates an active state to control and regulate the economy. The government can make expenditure in terms of infrastructure or through transfers and thus increase the total expenditure in the economy as advocated by Keynes.

  • Net Exports:(NX)

In an open economy, the total expenditure of the economy also includes the components of the net exports which is the total exports minus the total imports.[4]

Classical Economics

Classical economists relied on the Say's law which states that supply creates its own demand, which stemmed from the belief that wages,prices and interest rates are all flexible.[5] This comes from the classical thought that the factor payments which are made to the various factors of production during the production process, would create enough income in the economy to create a demand for the products produced.

Classical Aggregate Expenditure

This supports the classical thought which revolves around Adam Smith's invisible hand which states that the markets would achieve equilibrium via the market forces that impact economic activity and thus there is no need for government intervention.Moreover, the classical economists believed that the economy was operating at a full employment Hence the classical Aggregate expenditure model is:[6]

Aggregate Expenditure = Aggregate Consumption + Planned Investment

Therefore,

Where,

  • C= Consumption Expenditure
  • I = Aggregate investment ( Savings = Investment[7])

Classical economics has been criticized for its assumptions that the economy works on a full-employment equilibrium which is a false assumption as in reality, the economy operates at an under-employment equilibrium which provides the foundation for the Keynesian model of Aggregate Expenditure.

Keynesian Economics

Keynesian Economics believes, contrary to the classical thought that the Wages, Prices and interest rates are not flexible and hence violating Say's Law, which provided the foundation for the maxim that "supply creates its own demand". Keynes believed that the economy was subject to Sticky Prices and thus the economy was not in a state of perpetual equilibrium and also operated at an under-employment equilibrium.

Keynesian aggregate expenditure

Keynesian economics calls for a government intervention and is called demand side economics as it believes that aggregate demand and not the aggregate supply determines the GDP because of the difference between the Aggregate Supply and Planned expenditure in an economy.Hence Keynes believed that the government played an important role in the determination on the Aggregate Expenditure in an economy and was thus included Government Expenditure in the Aggregate Expenditure Function.

Hence,

Where,

  • C = Household Consumption Expenditure
  • I = Investment (Planned)
  • G = Government Expenditure
  • NX= Net Exports ( Exports - Imports )

Keynesian economics preaches that in times of a recession, the government must undertake the expenditure to compensate for the lack in the components of Household expenditure (C) and private investment (I) so as to ensure that the demand is maintained in the markets. This also leads to the Keynesian Multiplier which suggests that every dollar spent on investment creates a multiplier effect and leads to an increased expenditure of more than one dollar.

Aggregate Expenditure and Aggregate Supply

effect of increase in expenditure

An economy is said to be in an equilibrium when aggregate expenditure is equal to the aggregate supply (production) in the economy. According to Keynes, the economy does not stay in a perpetual state of equilibrium but the Aggregate expenditure and Aggregate Supply adjust each other towards equilibrium. When there is an excess supply over the expenditure and hence the demand there is an inventory leftover with the producers, which leads to a reduction in either the prices or the quantity of output and hence reducing the total output (GDP) of the economy. On the other hand, if there is an excess of expenditure over supply, then there is excess demand leading to an increase in prices or output. Hence the economy constantly keeps shifting between excess supply ( inventory ) and excess demand. Thus, the economy is constantly moving towards an equilibrium between the aggregate expenditure and aggregate supply.[8] In an under-employment equilibrium the Keynesian Cross refers to the point of intersection of the Aggregate Supply and the Aggregate Expenditure curve. The rise in the expenditure by either Consumption (C), Investment (I) or the Government (G) or an increase in the exports or a decrease in the imports leads to a rise in the aggregate expenditure and thus pushes the economy towards a higher equilibrium and thus reaching a higher level towards the potential of the GDP.[9]

See also

References

43 year old Petroleum Engineer Harry from Deep River, usually spends time with hobbies and interests like renting movies, property developers in singapore new condominium and vehicle racing. Constantly enjoys going to destinations like Camino Real de Tierra Adentro. Template:Refbegin

  • Parry G., and Kemp S., (2009) Discovering Economics Tactic Publications, South Perth.

Template:Refend

  1. ↑ 20 year-old Real Estate Agent Rusty from Saint-Paul, has hobbies and interests which includes monopoly, property developers in singapore and poker. Will soon undertake a contiki trip that may include going to the Lower Valley of the Omo.

    My blog: http://www.primaboinca.com/view_profile.php?userid=5889534
  2. ↑ Template:Cite web
  3. ↑ 20 year-old Real Estate Agent Rusty from Saint-Paul, has hobbies and interests which includes monopoly, property developers in singapore and poker. Will soon undertake a contiki trip that may include going to the Lower Valley of the Omo.

    My blog: http://www.primaboinca.com/view_profile.php?userid=5889534
  4. ↑ Template:Cite web
  5. ↑ 20 year-old Real Estate Agent Rusty from Saint-Paul, has hobbies and interests which includes monopoly, property developers in singapore and poker. Will soon undertake a contiki trip that may include going to the Lower Valley of the Omo.

    My blog: http://www.primaboinca.com/view_profile.php?userid=5889534
  6. ↑ 20 year-old Real Estate Agent Rusty from Saint-Paul, has hobbies and interests which includes monopoly, property developers in singapore and poker. Will soon undertake a contiki trip that may include going to the Lower Valley of the Omo.

    My blog: http://www.primaboinca.com/view_profile.php?userid=5889534
  7. ↑ 20 year-old Real Estate Agent Rusty from Saint-Paul, has hobbies and interests which includes monopoly, property developers in singapore and poker. Will soon undertake a contiki trip that may include going to the Lower Valley of the Omo.

    My blog: http://www.primaboinca.com/view_profile.php?userid=5889534
  8. ↑ 20 year-old Real Estate Agent Rusty from Saint-Paul, has hobbies and interests which includes monopoly, property developers in singapore and poker. Will soon undertake a contiki trip that may include going to the Lower Valley of the Omo.

    My blog: http://www.primaboinca.com/view_profile.php?userid=5889534
  9. ↑ Template:Cite web
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