Aggregate Expenditure and Output in the Short Run
Economics 110 with Al-hamdi at Kansas State University
About this deck
By: Brandon Evans
Textbook:
Macroeconomics (3rd Edition)
Created: 2010-11-03
Size: 11 flashcards
Views: 87
Textbook:
Macroeconomics (3rd Edition)Created: 2010-11-03
Size: 11 flashcards
Views: 87
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Aggregate Expenditure (AE)
The total amount of spending in the economy: the sum of consumption, planned investment, government purchases, and net exports.
Aggregate Expenditure Model
A macroeconomic model that focuses on the short-run relationship between total spending and real GDP, assuming that the price level is constant.
Inventories
Goods that have been produced but not yet sold.
Consumption Function
The relationship between consumption spending and disposable income.
Marginal Propensity to Consume (MPC)
The slope of the consumption function: the amount by which consumption spending changes when disposable income changes.
Marginal Propensity to Save (MPS)
The change in saving divided by the change in disposable income.
Cash Flow
The difference between the cash revenues received by a firm and the cash spending by the firm.
Autonomous Expenditure
An expenditure that does not depend on the level of GDP.
Multiplier
The increase in equilibrium real GDP divided by the increase in autonomous expenditure.
Multiplier Effect
The process by which an increase in autonomous expenditure leads to a larger increase in real GDP.
Aggregate Demand (AD) Curve
A curve that shows the relationship between the price level and the level of planned aggregate expenditure in the economy, holding constant all other factors that affect aggregate expenditure.
About this deck
By: Brandon Evans
Textbook: Macroeconomics (3rd Edition)
Created: 2010-11-03
Size: 11 flashcards
Views: 87
Textbook:
Macroeconomics (3rd Edition)Created: 2010-11-03
Size: 11 flashcards
Views: 87
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“Simply amazing. The flash cards are smooth, there are many different types of studying tools, and there is a great search engine. I praise you on the awesomeness.”
Dennis
Dennis