Macro Chapter 8

Front 1

John Maynard Keynes

Back 1

British economist (1883-1946) whose influence work offered an explanation of the Great Depresion and suggested as a cure, that the government should play an active role in the economy

Front 2

Classical economists

Back 2

A group of economists whose theory dominated economic thinking from the 1770's to the Great Depression. They believed recessions would naturally cure themselves becuase the price system would automatically restore full employment.

Front 3

Say's law

Back 3

The theory that supply creates its own demand

Front 4

Consumption Function

Back 4

A graph or table that shows the amount households spend for goods and services at different levels of disposable income

Front 5

Dissaving

Back 5

The amount by which personal consumption expenditures exceed disposable income

Front 6

Autonomous consumption

Back 6

Consumption that is independent of the level of disposable income

Front 7

Saving

Back 7

The part of disposable income households do not spend for consumer goods and services

Front 8

Marginal propensity to consume (MPC)

Back 8

The change in consumption resulting from a given change in real disposable income

Front 9

Marginal propensity to save (MPS)

Back 9

The change in saving resulting from a given change in real disposable income

Front 10

Investment demand curve

Back 10

The curve that shows the amount business spend for investment goods at different possible rates of interest

Front 11

Autonomous Expenditure

Back 11

Spending that does not vary with the current level of disposable income.

Front 12

Aggregate expenditures function(AE)

Back 12

The funciont that represnts total spending in an economy at a given level of real disposable income.