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Endogenous expenditure refers to spending that is determined by factors within an economic system, such as income levels, consumer confidence, and production capacity. It contrasts with exogenous expenditure, which is influenced by external factors like government policies or international trade. In macroeconomic models, endogenous expenditure can affect aggregate demand and overall economic activity, as it responds to changes in the economy itself. Understanding endogenous expenditure helps economists analyze how various economic variables interact and influence growth.

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1mo ago

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