[This is part of the series: The Complete Guide To Economics 101.]
What is an expenditures function?
An Expenditures Function is the mathematical relationship between income, autonomous expenditures, and induced expenditures.
This is where:
AE = OE + MPC(Y)
And:
AE = Aggregate Expenditures = (Autonomouns Expenditures + Induced Expenditures)
OE = Autonomous Expenditures
MPC = Marginal Propensity To Consume
Y = Income