Aggregate Expenditure Calculator

Formula

The formula to calculate Aggregate Expenditure (E) is:

\[ E = NX + G + I + C \]

Where:

$ E $ is the Aggregate Expenditure ($)
$ NX $ is the Net Exports ($)
$ G $ is the Government Spending ($)
$ I $ is the Total Investments ($)
$ C $ is the Household Consumption ($)

What is Aggregate Expenditure?

Aggregate Expenditure is a financial measure of the total value of all goods and services currently produced in an economy. It includes the sum of net exports, government spending, total investments, and household consumption. This metric is crucial in understanding the overall demand in an economy and is often used in macroeconomic analysis to assess economic performance and predict future growth.

Example Calculation

Let's consider an example:

Net Exports (NX): $500 million
Government Spending (G): $1,200 million
Total Investments (I): $800 million
Household Consumption (C): $2,000 million

Using the formula to calculate Aggregate Expenditure:

\[ E = 500 + 1200 + 800 + 2000 = 4500 \, \text{million dollars} \]

This means that the aggregate expenditure in this economy is $4,500 million.