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Consumption spending expenditure - PowerPoint PPT Presentation

Aggregate Expenditure, Equilibrium GDP and The Fiscal policy

Aggregate Expenditure, Equilibrium GDP and The Fiscal policy. The Simple Economy Case. We assume here that we have a simple economy where G = 0 ( no government effect on the economy) and X = 0, M = 0, and hence X-M = 0 (no foreign trade). In such a case the national spending becomes = C + I.

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Consumption spending expenditure - PowerPoint PPT Presentation

Aggregate Expenditure, Equilibrium GDP and The Fiscal policy