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10 Cards in this Set
- Front
- Back
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Currency Exchange Market
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The international market for a currency
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Deficit
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Quantity demanded is greater than quantity supplied
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Long Run Aggregate Supply
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Aggregate supply at an economy’s natural rate of employment. Vertical line on an AS/AD graph.
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Marginal propensity to consume (MPC)
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The fraction of additional income spent by households and firms
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Marginal propensity to save (MPS)
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Fraction of additional income saved by households and firms
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Net exports
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Number of exports minus the number of imports of an economy
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Nominal
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The value of something at the current price level
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Real
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The value of something at a base year price level
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Short Run Aggregate Supply
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Shows the relationship between an economy’s supply related to the price level and GDP. Upward sloping on the AS/AD graph.
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Spending multiplier
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Factor at which government spending stimulates the economy. It is equal to 1/(1 – MPC)
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