Term
| Unplanned or Involuntary Additions to Inventory |
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Definition
| The excess of what businesses plan to produce over what households plan to consume. |
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Term
| Unplanned or Involuntary Reductions to Inventory |
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Definition
| The excess of what households plan to consume over what businesses plan to produce. |
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Term
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Definition
| Planned investments by firms. |
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Term
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Definition
| Actual investments by firms |
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Term
| Average Propensity to Consume |
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Definition
| The percentage of a given disposable income that people tend to consume. |
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Term
| Average Propensity to Save |
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Definition
| The percentage of a given income that people tend to save. |
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Term
| Marginal Propensity to Consume |
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Definition
| The change in consumption associated with a change in income. |
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Term
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Definition
| The effect of change in aggregate demand on income. |
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Term
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Definition
| The multiple by which income changes as aggregate demand changes |
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Term
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Definition
| The formula for determining the multiple change in income associated with a change in aggregate demand. |
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Term
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Definition
| A multiplier effect that takes effect instantaneously |
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Term
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Definition
| A multiplier effect that occurs over several periods of time. |
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Term
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Definition
| The argument that induced investment is related to the rate of change in depand or output. |
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Term
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Definition
| The argument that during a recession, attempts to increase savings reduced output and at a lower level of income, savings actually fall. |
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Term
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Definition
| The amount by which aggregate demand would have to increase to move net national income to its full-employment level. |
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Term
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Definition
| The amount by which aggregate demand would have to decrease to move net national income to its full-employment level. |
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Term
| Balanced-Budget-Multiplier |
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Definition
| The change in net national income that results when both government expenditures and taxes change in the same direction and by the same amount |
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Term
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Definition
| A group who purport to build on early Keynesian theory and who argue for strong government intervention to create full employment and stable prices. |
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Term
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Definition
| Demand for products created by first-time buyers. |
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Term
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Definition
| Demand that is created when consumers replace products |
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Term
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Definition
| A term used to describe the combination of high unemployment and a high rate of inflation |
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