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12 Cards in this Set

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  • Back
John Maynard Keynes
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
Classical economists
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.
Say's law
The theory that supply creates its own demand
Consumption Function
A graph or table that shows the amount households spend for goods and services at different levels of disposable income
The amount by which personal consumption expenditures exceed disposable income
Autonomous consumption
Consumption that is independent of the level of disposable income
The part of disposable income households do not spend for consumer goods and services
Marginal propensity to consume (MPC)
The change in consumption resulting from a given change in real disposable income
Marginal propensity to save (MPS)
The change in saving resulting from a given change in real disposable income
Investment demand curve
The curve that shows the amount business spend for investment goods at different possible rates of interest
Autonomous Expenditure
Spending that does not vary with the current level of disposable income.
Aggregate expenditures function(AE)
The funciont that represnts total spending in an economy at a given level of real disposable income.