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### 8 Cards in this Set

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 Accelerator accelerator theory suggests that the level of net investment will be determined by the rate of change of national income. If national income is growing at an increasing rate then net investment will also grow & vice versa Ad-valorem taxes Ad-valorem taxes are taxes that are charged as a percentage of the value of the good or service. VAT is an example of an ad-valorem tax as it is charged at 17.5%. Aggregate demand Aggregate demand is the total level of demand in the economy. It is the total of all desired expenditure at any time by all groups in the economy. Aggregate demand curve The aggregate demand curve shows the level of aggregate demand at every price level. It will always be downward sloping as there will be less demand at higher price levels. Aggregate supply the total quantity supplied at every price level. It is the total of all goods and services produced in an economy in a given time period. Average propensity to consume (APC) the proportion of income that is spent. If a person spends £4,000 of a £10,000 income, then the APC is 0.4. Average rate of tax The average rate of tax is the total amount of income tax paid as a percentage of a person's income. Balanced budget A balanced budget arises when the government receives the same amount of money from taxation as it is spending.