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Definitions and explanations of key macroeconomic concepts, including mpc, mps, ad, as, and fiscal policy. Learn about the relationship between income, consumption, saving, and economic equilibrium.
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equal to change in consumption associated with a given change to income. TERM 2
DEFINITION 2 equal to change in saving associated with given change in income TERM 3
DEFINITION 3 always equals one (1) or 100% TERM 4
DEFINITION 4 AE= C + I TERM 5
DEFINITION 5 I + G +X = S+T+M
output of good and services (RGDP) demanded at different price levels TERM 7
DEFINITION 7 Downward sloping. TERM 8
DEFINITION 8 consumption, investment, government spending, net exportsm total exports, total imports (AD= C+ I + G +( X - M ) TERM 9
DEFINITION 9 income and wealther, intrest rates, future expenditures, or consuer confidence, income taxes. TERM 10
DEFINITION 10 the RGDP that firms will produce at varying price levels, During depression the economy has alot of slack and the aggregated supply curve will be flat in the SRAS aggregated supply is positively sloped BC many imputs cose are slow to changem but in the LRAS aggregated supply curve is verticle at full employment has reached its capacity to produce.
increase in AS needed to bring a depressed economy back to full employment equal to the GDP gap divided by the multiplier TERM 17
DEFINITION 17 short run equillibrum is higher than economy potential, government shoule reduce AD. This avoids the increase cost that happens when you use passive policy. TERM 18
DEFINITION 18 results when AD expands so much that the equillibrum output exceeds full employment output and price levels rise. TERM 19
DEFINITION 19 results when a supply shock hits the economy reducing AS and reduces output and increasing the price level. TERM 20
DEFINITION 20 number thats multiplied by initial change in the autonoumus spending to obtail total change in AS
the demand curve will shift. TERM 22
DEFINITION 22 influencing the economic activity through changes in federal government purchanes, transfers payments and or taxes TERM 23
DEFINITION 23 deliberant change in tax revenue or government spending to stabilize the economy TERM 24
DEFINITION 24 change in tax revenue or government spending without any deliberate policy TERM 25
DEFINITION 25 involves increasing government spending, increasing transfer payment, or decreasing taxes to increase AD to expand output and the economy; required in Recession
