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12 Cards in this Set

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After tax income of consumers, personal income less personal taxes
disposable income
total consumption in a given period divided by total disposable income
average propensity to consume
the fraction of each additional dollar of disposable income spent on consumption; the change in consumption dived by the change in disposable income
marginal propensity to consume
the fraction of each additional dollar of disposable income not spent on consumption 1 - mpc
marginal propensity to save
a change in consumer spending caused by a change in the value of owned assets.
wealth effect
a mathematical relationship indicating the rate of desired consumer spending at various income levels.
consumption function
consumption expenditure in excess of disposable income; a negative saving flow
dissaving
The value of total output produced at full employment
full-employment gdp
the value of total output produced at macro equilibrium
equilibrium gdp
the amount by which equilibrium gdp falls short of full employment gdp
recessionary gdp gap
The amount by which equilibrium gdp exeeds full employment gdp.
inflationary gdp gap
an increase in the price level initated by excessive aggregate demand
demand pull inflation