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17 Cards in this Set

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