The Keynesian Cross a simple closed economy model in which income is determined by expenditure due to J.M. Keynes) Notation I planned investment E=C+I+G= planned expenditure Y= real GDP actual expenditure Difference between actual planned expenditure: unplanned inventory investment CHAPTER 10 Aggregate Demand I slide 3CHAPTER 10 Aggregate Demand I slide 3 The Keynesian Cross ▪ A simple closed economy model in which income is determined by expenditure. (due to J.M. Keynes) ▪ Notation: I = planned investment E = C + I + G = planned expenditure Y = real GDP = actual expenditure ▪ Difference between actual & planned expenditure: unplanned inventory investment