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17 Cards in this Set
- Front
- Back
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The Actual Amount of Investment that takes place, includes items such as unplanned changes in inventories
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Actual Investment
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The total income received by all factors of production in a given period
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Aggregat Income
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The total quality of goods and services produced or supplied in an economy in a given period
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Aggregate Output
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A combined term used to remind you of the exact equality between aggregate output and aggregate income
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Aggregate Output(income)(Y)
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A variable that is assumed not to depend on the state of the economy that is, it does not change when the economy changes
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Autonomous Variable
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Production minus Sales
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Change in Inventory
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The relationship betweeen consumption & income
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Consumption Function
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Those additions to capital stock and inventory that are planned by firms
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Desired, or planned investment
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Occurs when there is no tendency for change, when planned aggregate expenditure is equal to planned aggregate output
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Equillibrium
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Somethings that is always true
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Identity
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Measure of prices that producers receive for products at all stages in the production process
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Investment
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The fraction of a change in income that is consumes, or spent
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Marginal propensity to consume (MPC)
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That fraction of a change in income that is saved
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Marginal propensity to save (MPS)
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The Ratio of the change in the equilibrium level of output to a change in some autonomous variable
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Multiplier
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It contradicts the widely held belief that " a penny saved is a penny earned"
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Paradox of thrift
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The total amount the economy plans to spend in a given period, equal to consumption plus planned investment AE= C+I
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Planned aggregate expenditure
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The part of its income that a household does not consume in a give period.
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Saving (S)
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