1 the Elements of Keynesian Cross consumption function: C=C(Y-T) government policy variables:G=G,T= for now, investment is exogenous: T-T planned expenditure:E=C(Y-T)++G Equilibrium condition: Actual expenditure =Planned expenditure Y=E CHAPTER 10 Aggregate Demand I slide 6CHAPTER 10 Aggregate Demand I slide 6 the Elements of Keynesian Cross C C Y T = − ( ) I I = G G T T = = , E C Y T I G = − + + ( ) Actual expenditure Planned expenditure Y E = = consumption function: for now, investment is exogenous: planned expenditure: Equilibrium condition: government policy variables: 1