1. What is Aggregate Expenditure?

Aggregate Expenditure (AE) is the total amount of spending in the economy that determines the level of GDP. It includes consumption (C), investment (I), government spending (G), and net exports (NX). This calculator provides the total national expenditure for the Philippines using the expenditure approach.

2. How Does the Calculator Work?

The calculator uses the Aggregate Expenditure equation:

Where:

• \( C \) — Consumption expenditure by households (PHP)
• \( I \) — Investment expenditure by businesses (PHP)
• \( G \) — Government spending on goods and services (PHP)
• \( NX \) — Net exports (Exports - Imports) (PHP)

Explanation: The equation sums up all components of expenditure in an economy to measure total national spending.

3. Importance of AE Calculation

Details: Calculating aggregate expenditure helps economists and policymakers understand economic activity, predict GDP growth, and formulate fiscal policies for the Philippines.

4. Using the Calculator

Tips: Enter all values in Philippine Pesos (PHP). Consumption, investment, and government spending should be positive values, while net exports can be positive or negative.

5. Frequently Asked Questions (FAQ)

Q1: What's included in consumption expenditure?
A: All spending by households on goods and services, including durable goods, non-durable goods, and services.

Q2: How is investment defined in AE?
A: Business spending on capital goods, residential construction, and changes in business inventories.

Q3: Does government spending include transfers?
A: No, only direct government purchases of goods and services. Transfer payments are excluded.

Q4: Why can net exports be negative?
A: When imports exceed exports, net exports become negative, indicating more spending on foreign goods than foreign spending on domestic goods.

Q5: How often should AE be calculated?
A: Typically calculated quarterly by government statistical agencies to monitor economic performance.