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Related Flashcards
Related Topics
Cards In This Set
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Consumer spending
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Household spending on goods and services from domestic and foreign firms.
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Disposable income
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Income plus gov't transfers minus taxes; the total amt of household income available to spend on consumption and saving.
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Exports
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Goods and services sold to other countries.
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Gov't purchases of goods and services
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Total purchases by fed, state, and local gov'ts on goods and services.
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Imports
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Goods and services purchased from other countries.
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Investment spending
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Spending on productive physical capital, such as machinery and construction of structures, and on changes to inventories.
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Demand shock
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An event that shifts the aggregate demand curve.
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Inflationary gap
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Aggregate output is above potential output.
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Marginal propensity to consume
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The increase in consumer spending when disposable income rises by $1.
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Recessionary gap
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Aggregate output is below potential output.
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(spending) multiplier
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The ratio of the total change in real GDP caused by an autonomous change in aggregate spending to the size of that autonomous change.
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Supply shock
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An event that shifts the short-run aggregate supply curve.
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Aggregate production function
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Hypothetical function that shows how productivity (real GDP per worker) depends on the quantities of physical capital per worker and human capital per worker as well as the state of technology.
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Convergence hypothesis
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Int'l differences in real GDP per capita tend to narrow over time.
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Human capital
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The improvement in labor created by the education and knowledge embodied in the workforce.
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