Term
|
Definition
| the relationship in the economy between consumption and income, other things constant |
|
|
Term
| marginal propensity to consume (MPC) |
|
Definition
| the fraction of a change in income that is spent on consumption; the change in consumption divided by the change in income that caused it |
|
|
Term
| marginal propensity to save (MPS) |
|
Definition
| the fraction of a change in income that is save; the change in saving divided by the change in income that caused it |
|
|
Term
|
Definition
| the relationship between saving and income, other things constant |
|
|
Term
|
Definition
| the value of all assets minus liabilities |
|
|
Term
| life-cycle model of consumption and saving |
|
Definition
| young people borrow, middle-agers pay of debts and save, and older people draw down their savings; on average, net savings over a lifetime is usually little or nothing |
|
|
Term
|
Definition
| the relationship between the amount businesses plan to invest and the economy's income, other things constant |
|
|
Term
|
Definition
| a term that means "independent"; for example, autonomous investment is independent of income |
|
|
Term
| government purchase function |
|
Definition
| the relationship between government purchases and the economy's income, other things constant |
|
|
Term
|
Definition
| the relationship between net exports and the economy's income, other things constant |
|
|
