econ 105 ch 21

Card Set Information

Author:
makemehappy
ID:
60459
Filename:
econ 105 ch 21
Updated:
2011-01-18 01:42:28
Tags:
econ
Folders:

Description:
terms to study
Show Answers:

Home > Flashcards > Print Preview

The flashcards below were created by user makemehappy on FreezingBlue Flashcards. What would you like to do?


  1. Desired aggregate expenditure (AE)
    • -
    • The sum of desired or planned spending on
    • domestic output by households, firms, governments, and foreigners.
  2. Autonomous expenditure
    • -
    • Elements of expenditure that do not change
    • systemically with national income
  3. Induced expenditure
    • -
    • Any component of expenditure that is
    • systematically related to national income
  4. Closed economy
    • -
    • An economy that has no foreign trade in goods,
    • services, or assets.
  5. Saving
    • All
    • disposable income that is not spent on consumption.
  6. Consumption function
    • -
    • The relationship between desired consumption
    • expenditure and all the variables that determine it; in the simplest case, the
    • relationship between desired consumption expenditure and disposable income.
  7. Average propensity to consume (APC)
    • -
    • Desired consumption divided by the level of
    • disposable income.
  8. Marginal propensity to consume (MPC)
    • -
    • The change in desired consumption divided by the
    • change in disposable income that brought it about.
  9. Average propensity to save (APS)
    • -
    • Desired saving divided by disposable income.
  10. Marginal propensity to save (MPS)
    • -
    • The change in desired saving divided by the
    • change in disposable income that brought it about.
  11. Aggregate expenditure (AE) function
    • -
    • The function that relates desired aggregate
    • expenditure to actual income.
  12. Marginal propensity to spend
    • -
    • The change in desired aggregate expenditure on
    • domestic output divided by the change in national income that brought it about.
  13. Simple multiplier
    • -
    • The ratio of the change in equilibrium national
    • income to the change in autonomous expenditure that brought it about,
    • calculated for a constant price level.

What would you like to do?

Home > Flashcards > Print Preview