Shared Flashcard Set

Details

Econ dr j
AE
15
Economics
Undergraduate 1
06/19/2011

Additional Economics Flashcards

 


 

Cards

Term
Aggregate Expenditure(AE)
Definition
the total amount spent for final goods and services in an economy
Term
Autonomous expenditure(Ea)
Definition
refers to the point in your expenditure that is not dependent on your income
Term
Marginal proprnsity to expand(mpey)
Definition
refers to the function spent from an additional dollar of income
Term
Write the Consumption function and explain its components.
Definition
C = C + mpcY

C = automous consumption
mpcy = induced consumption
mpc = marginal propensity to consume
Y = disposable income
Term
recessionary gap
Definition
the difference between equillbrium income and potential income when potential income is higher that equilibrium income
Term
Inflatory gap
Definition
the difference between wquilibrium income and potential income when potential income is lower that equilibrium income
Term
the multiplier
Definition
a number that tells us how much income will change in response to a change in (taxes, government expenditure)
Term
Fiscal Drag
Definition
when potentiol income begins to grow and pull the economy out of a recission, the built in stabilizers could retard the actual economic growth
Term
Budget deficit
Definition
the difference between government revenue and expenditure
Term
National debt
Definition
results from accumulated deficits minus accumulated surplus
Term
Laffer curve
Definition
depicts the relationship between tax rates and tax revenues. As tax rates increase between 0 – 100% tax rates revenues will increase only upto a certain point
Term
Structural deficit
Definition
the portion of the deficit that could be experienced when the economy is at full employment. It is due to changes in discretionary fascal policy
Term
Passive deficit
Definition
the part of the deficit that would exist when the economy is below potential output. It occurs when government revenue falls during a recission while transfer payments increase
Term
Internal debt
Definition
u.s. government debt (treasury bonds) held by the u.s. households and institutions
Term
External debt
Definition
u.s. government debt (treasury bonds) held by foreign countries and institutions
Supporting users have an ad free experience!