Econ 251 Test 4 Study Guide Lecture

Econ 251 Test 4 Study Guide Lecture - ECONOMICS 251 TEST...

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ECONOMICS 251 TEST NO. 4 STUDY GUIDE TERMS Aggregate Demand: Aggregate Supply: Macro equilibrium: Aggregate Spending: Derived Demand: The demand for labor and the other factors of production depends on the demand for final goods and services produced by these factors. Consumption: Expenditure by consumers on final goods and services. Disposable Income: After-tax income of consumer Disposable Saving: Average Propensity to Consume (APC): Proportion of total income spent on consumer goods and services  APC = (Consumption / Disposable income) = (C / Yd) = .98 or 98% Marginal Propensity to Consume (MPC): Fraction of each additional dollar income that is spent on consumption  MPC = (change in consumption / change in disposable income) = (delta C / delta Yd) Marginal Propensity to Save (MPS): Consumption Function: Is a mathematical relationship indicating the rate of desired consumer spending at various income levels. Consumption = MPC x DI
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This note was uploaded on 04/23/2008 for the course ECON 251 taught by Professor Abid during the Spring '08 term at Grand Rapids Community College.

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Econ 251 Test 4 Study Guide Lecture - ECONOMICS 251 TEST...

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