Term
| Aggregate planned expenditure |
|
Definition
Planned consumption expenditure plus planned investment plus planned government expenditure plus planned exports minus planned imports |
|
|
Term
|
Definition
| The components of aggregate expenditure that do not chang when real GDP changes |
|
|
Term
|
Definition
| The components of aggregate expenditure that change when real GDP changes |
|
|
Term
|
Definition
| The relationship between consumption expenditure and disposable income, other things remaining the same |
|
|
Term
|
Definition
| Aggregate income (GDP) minus net taxes |
|
|
Term
|
Definition
| Disposable income not spent on consumption goods and services |
|
|
Term
| Marginal propensity to consume |
|
Definition
| The fraction of a change in disposable icome that is spent on consumption - the change in consumption expenditure divided by the change in disposable incomethat brought it about |
|
|
Term
| Marginal propensity to import |
|
Definition
| The fraction of an increase in real GDOP that is spent on imports - the change in imports divided by change in real GDP |
|
|
Term
|
Definition
| The level of aggregate expenditure that occurs when aggregate planned expenditure equals real GDP |
|
|
Term
|
Definition
| The amount by which a change in any component of autonomous expenditure is magnified or multiplied to determine the change that it generates in equilibrium expenditure and real GDP |
|
|
Term
|
Definition
| The fraction of a change in real GDP that is paid in income taxes - the change in tax payments divided by the change in real GDP |
|
|
Term
| Distinquish between autonomous expenditure and induced expenditure and explain how real GDP influences expenditure plans |
|
Definition
|
|
Term
| Explain how real GDP adjusts to achieve equilibrium expenditure |
|
Definition
|
|
Term
| Describe and explain the expenditure multiplier |
|
Definition
|
|
Term
| Derive the AD curve from equilibrium expenditure |
|
Definition
|
|
